The Research On The Protection Of Bank Financing Contract Principals’ Interests

The legal attribute of the bank financing contract has not beenspecifically defined, which is a kind of unnamed contract, and it should beanalogized to trust. Nowadays, it is hard for bank financing contractprincipals to claim on the interests because of the negligence of the unequalstatus between banks and principals. Bank financing contract principals arenot commercial subject, they should be specially protected when they arereceiving financial services and in financial instruments trading. However, itis difficult for principals to claim their interests in traditional civil area by theapproach of contractual liability.The concept of financial consumer protection is the reforming tendencyin advanced financial legislation countries, and accepted by academia andsupervision system in China. Bank financing contract principals are typicalfinancial consumer, and the rights and obligations between banks andprincipals should be rearranged. In order to cover the wide gap, theprecondition of Caveat emptor in bank financing contract dealing is Caveat venditor, namely banks should be opposed information disclosure obligations.Specifically banks should take the initiative in evaluating the venture, toassure clients of suitable financial instruments. Before the contractconclusion, banks are supposed to illustrate the venture to clients, andthroughout the fulfillment of contract. Additionally, promotion regulation andcooling-off period are also needed in order to balance the unequal statusbetween banks and principals, and protect the interests of principalseffectively.