System Of The Maximum Amount Of Guarantee

Market economy in China is now at a repaid advancing stage, warranty systemprovides safeguard for various social economic activities and promotes all kinds ofeconomic intercourse work smoothly. The maximum amount of guarantee isbeneficial to keep the stability and security of trade due to its advantages included canbe applied for long-term once signed, save the contact cost of two parties, beneficialto establish more stable trade relationship.etc. Therefore, the scope of its application isincreasingly wide and it becomes the choice of more and more businessmen. Due tothe weaknesses of system construction and theoretical research, our country currentthe maximum amount of guarantee system has a host of problems.Due to the imperfection of warranty system in our country, there are a host ofproblems in current maximum amount of guarantee system. The paper’s case is fromthe civil judgment (2007) Ming-Zhong-Zi No.36by the Supreme People’s Court,which take the case between Tianjin Branch of China CITIC Bank CorporationLimited (CITIC Bank as below) VS Aeolus Tyre Corporation Limited (AeolusCorporation as below) and Hebei Baoshou Corporation Limited (BaoshouCorporation as below) for example. It analyzes related hotspot and difficulties inwarranty system of the maximum amount, then according to current laws, makinglegal evaluation and coming to the verdict. The paper states the topic mainly throughfollowing three sections:Section one: summarizing simply the case cited in the paper and refining thehotspot problem of it. In the case, Baoshou Corporation borrowed money from CITICBank, Aeolus Corporation provided guarantee for Baoshou Corporation’s debt basedon their contact calle“dMutual Guarantee Contact”and signed the guarantee contact ofthe maximum amount with CITIC Bank. After the performance deadline of debt, thedebtor did not perform its obligation to liquidate debt. Then, according to the contactagreement, CITIC Bank asked the debtor and the guarantor to shoulder joint liabilityto pay off the debt. However, both the debtor and the guarantor did not do like that.The topics of the debate in this case are: the effectiveness of“the guarantee contact ofthe maximum amount”; when the lender was not the real user, how the responsibilityof the guarantor is; what effects the single debt has on the effectiveness of “theguarantee contact of the maximum amount” and the definition of settlement day of the maximum amount guarantee. Moreover, limitation period problems involved in thecase deserve more attention as well.Section two: analyzing focus and main problems of dispute among partiesinvolved in the case in theory. Main problems involved in the case are all associatedwith the maximum amount of guarantee. Therefore, the author explains the maximumamount of guarantee at first and summarizes its characters. After that, theoreticallyanalyzing the focus and related other hotspots among the parties in the case one byone, comparing their differences then coming to the author’s own view based ontheories and empirical experience.Section three: Conclusion. Basing on the law, regulation and judicial explanation,the author draws related conclusions of the case. According to the reasons theappellant raised, combining the regulations of the law, the author presents theevidence to confirm the facts of the case item by item then comes to the conclusionand makes accordingly judgment. The case’s appellant provides the evidences in firstand second instance are below the requirements of the evidence rule of civil litigationfor probative force. Therefore, the fact the appellant’s claims cannot be admitted bythe court and was rejected finally. The guarantor acquires to shoulder joint obligationfor the debt involved in the case in the maximum amount of guarantee quota.