Research On The Right Of The Guarantor Against The Principal Debtor

Lending and transactions are frequently encountered in market economy. In modern economic activities, guarantee system exerts positive impact on the activation of finance and the guarantee of transactions. However, a guarantor who ensures that the contract is unilateral and gratuitous bears more liabilities and enjoys fewer rights. The guarantor bears higher risks, shoulders more obligations and enjoys less rights and interests when providing guarantee for the debtor. In economic activities, it is common to come across debtors with poor credits who evade payments of debts and debtors in deteriorating operating status. Therefore, the rights and interests of guarantee cannot always be ensured, which urges us to choose the rights and interests of the guarantor as our priority.To ensure the rights and interests of the guarantor, it is of particular importance to improve the rights enjoyed by the guarantor against the principal debtor, because the rights and interests of the creditor shall not be impaired. The principal debtor shall fulfill the obligations on debts; the guarantor shall provide guarantee and bears the liability to make payments for the debts on behalf of the debtor. When assuming responsibilities, the guarantor shall claim payment toward the principal debtor, who will be the ultimate bearer of the debts. Therefore, the debtor has the obligation to ensure the rights and interests of the guarantor.The paper consists of the following four parts except for introduction and conclusion:Part I "Theoretical Basis of the Right of Guarantor against the Principal Debtor". The paper firstly examines the theoretical basis of the rights enjoyed by the guarantor against the principal debtor. Based on the speculation of the generation and development of the guarantee system of debts, it is found that the guarantee systems of various nations have stipulated various rights enjoyed by the guarantor against the principal debtor. When it comes to the relationship between the guarantor and the principal debtor, it is necessary to provide each contract with reasonable accordance, based on which the guarantor enjoys necessary rights against the principal debtor. While as far as the balance of interests is concerned, under the current system background, the guarantor bears more liabilities and shoulders higher risks, which will not be conductive to the development of guarantee, so we shall lay significance on the rights of the guarantor, and especially on the rights that should be enjoyed by the guarantor against the principal debtor.Part II " Right of Guarantor against the Principal Debtor Based on Instance of Legislation". Inspections and categorization are conducted toward the legislation around the world Part Ⅱ.. The various national and regional legislations have not only stipulated the afterwards relief rights of the guarantor against the principal debtor, but also provided the prior relief rights enjoyed by the guarantor against the principal debtor. Most nations have issued provisions to protect the right of recourse and the right of subrogation of the guarantor against the principal debtor simultaneously and respectively. In various nations/regions, it is stipulated that the guarantor is authorized to exercise the right of recourse in advance against the principal debtor, to apply for the exemption of responsibilities and to require security rights. The regional legislative institutions have also noticed the various risks faced by the guarantor when requiring claim and have stipulated different corresponding relief measures.Part Ⅲ "Right of China’s Guarantor against the Principal Debtor". Inspections are conducted toward China’s legislation and academic debates. Based on the inspection of China’s legislation and academic debates, although China has issued provisions on the rights enjoyed by the guarantor against the principal debtor, it has not issued provisions on the right of subrogation and the right of claim for responsibility exemption of the guarantor. When exercising the right of recourse in advance, the stipulated reasons are too limited to ensure the rights and interests of the guarantor before and after the performance of duties, which will eventually result in the invalidation of the guarantor’s right of recourse.Part Ⅳ "Reflections and Researches on the Improvement of the Right of Guarantor against the Principal Debtor in China".It is indicated in the paper that guarantee is of great significance in economic activities. However, guarantee is highly risky and the guarantor is often poorly aware of the risks. The guarantee contract is unilateral and the guarantor often bears more liabilities and enjoys fewer rights. Therefore, the rights and interests of the guarantor shall be taken into consideration in the construction of a guarantee system. When measuring the interests of the creditor, the principal debtor and the guarantor in a guarantee relationship, it should be noticed that the ultimate aim is for the principal debtor to clear off all the debts and reach a satisfying consensus. In this way, we shall consider urging the principal debtor to take the initiative to discharge the debts, so that the creditor will obtain indemnification and the guarantor will be exempt from the liability of guarantee. Faced by the repeated infringement of the rights and interests of the guarantor, we shall endow with the guarantor the right of guarantee exemption, the right of subrogation, as well as the right to ask the principal debtor to protect the guarantor. In the meantime, we shall issue the Law of Obligation to improve the system and to protect the rights and interests of the guarantor in a systematic manner.