On The Effectiveness Of Inter-Enterprise Loan Contracts

According to China's financial and monetary policy and relevant laws and regulations, loans can only be supplied by banks and other financial institutions as their franchise. However, inter-enterprise loan is a widespread phenomenon in the daily life. The appearance of inter-enterprise loans has its profound social background and solid social foundation, there are variable forms of the inter-enterprise loan contracts, and it's hard to be eliminated in the short terms.Judicial practice holds a negative attitude towards the effectiveness of inter-enterprise loan contracts, the legal documents that act as the basis of the judgments can be found in various legal levels, such as the laws, administrative rules, regulations and judicial interpretation. However, the effectiveness of a contract must be determined according to the laws and administrative rules, legal documents in other ranks have no qualification to recognize the effectiveness. Inter-enterprise loans by chance are not the same as"loans"in the banking business, the argument lacks rationality that inter-enterprise loan is invalid for its violation of financial policy and banking rules. It is not persuasive either that denying the effectiveness of inter-enterprise loan contract on the basis of"harming the public interest"or"violating the mandatory rules of laws and administrative rules".It is positive to open inter-enterprise loan market and admit the effectiveness of inter-enterprise loan contracts, on the one hand, the inter-enterprise loan can alleviate the credit pressure on banks and other financial institutions, make good use of the surplus and deficiency in fund, provide new financing ways for the SMEs, bring better economic and social benefits to the enterprises, optimize the allocation of social resources, and promote the sound development of the economy; on the other hand, the basic principles of admitting the effectiveness of inter-enterprise loan contracts are the outlets of emphasizing the expression of true meanings between two parties and fully respecting the will of the economic entities in the market, reflect the private law spirit of the freedom of contract. In addition, the supportive attitude reflected in the existing policy and legal documents also provides a strong support to the effectiveness of inter-enterprise loan contracts.The courts should adopt reasonable measures and corresponding programs to legalize inter-enterprise loan, in accordance with judicial practice and the relevant legal principles, identify several situations in which inter-enterprise loan contracts can be effective, so that provide useful guidance to the future judgment. Judges should focus on the specific circumstances of a case, on the basis of following the value of freedom, justice, safety of transaction and efficiency, give comprehensive consideration to the national, social and private interests, and finally make correct and fair judgment on the effectiveness of inter-enterprise loan contract.