On The Consequences Of Effectiveness On The Trust-Management Contract And The Guarantee Clause

With the growth of market economy and the huge profits brought by the operation of capital market, the trust-management prevails. Not only the great incomes the capital market brought to us, but also the great risks at the same time. To circumvent the potential hazards of the investment, the Guarantee Clause will be put into the Trust-Management Contract by the truster for maximization of benefits in most of trust-management practices at present, which is a deontological agreement to the trustee. It looks like a motivation and restriction mechanism superficially, however, according to the existing legal provision0s of our country and the requirements of financial order, the Guarantee Clause in the Trust-Management Contract infringes the fairness doctrine of the civil laws and the prohibitions in the financial laws, which means that there are serious risks during the actual performance of the civil rights and obligations set by the Clause. Fundamentally, the Guarantee Clause can hardly be carried out in practice, which leads to the disorder of market transition and escalation of disputes and lawsuits between the trusters who want to recoup the capital outlay by the Clause and the security companies who refuse to pay it. Because of the absence of relevant rules or laws, many major cognitive disparities emerged during the judicial proceedings as soon as such cases appear, and the affirmation of the effectiveness of the Guarantee Clause in the Trust-Management Contract is the most prominent topics. So from the view of Judicial Judgment, we must adopt a cautious attitude to the affirmation of the effectiveness of the Guarantee Clause in the Trust-Management Contract. Starting from a real case, this thesis analyzes the Trust-Management Contract and the Guarantee Clause of it in the current domestic judiciary field from the angles of the nature and the effectiveness of the Trust-Management Contract, the effectiveness of the Guarantee Contract and the legal issues of the preceding case. The author admits the effectiveness of the Guarantee Clause under certain conditions, distinguish the effectiveness of the Trust-Management Contract and the Guarantee Clause, and try to allocate the risks undertaken by trusters and trustees respectively in the trust-management practices in a fair and reasonable way.