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The Restriction Of The Right To Dissolve Executory Contract Of Bankruptcy Administrators

Posted on:2015-03-28Degree:MasterType:Thesis
Country:ChinaCandidate:Q WangFull Text:PDF
GTID:2266330428955859Subject:Civil and Commercial Law
Abstract/Summary:PDF Full Text Request
Bankruptcy administrators shall comply with the following principles whenthey exercise the right to dissolve executory contracts, i.e. principle of maximizationof bankruptcy property, principle of interests balance, principle of unitary of legalpolicy goal and principle of necessity. The bankruptcy administrators shall observesuch principles when exercise the right to dissolve executory contracts if thelegislation doesn’t specify. Principle of maximization of bankruptcy property is aordinary principle in bankruptcy law, and the provision that bankruptcyadministrators shall not terminate unilateral contracts in the event that the bankruptis a creditor reflect this principle; principle of interests balance is a principle which isfrom America and is used to restrict the right to dissolve executory contracts ofbankruptcy administrators. Some of the scholars from China also agree to take thisprinciple as the ordinary principle to restrict the right to dissolve executory contractsof bankruptcy administrators. The restriction in contract of ownership reservationand IP lisence contract reflects principle of interests balance; principle of unitary oflegal policy goal means if the termination of contract results that the goal of otherlaws cannot achieve and will also not obey the other principles, the bankruptcyadministrators shall not terminate the contracts. The restriction in non-debt contracts,contract of guaranty, lease contracts, labor contract and life insurance contract reflectthis principle; principle of necessity means bankruptcy administrators shall notterminate the contract if the termination of the contract is not the only way to settlethe dispute, and it is not necessary to exercise termination right.“the scope ofexecutory contracts” and “dissoluble scope” in contracts law reflect this principle. Ifthere is no otherwise provisions in legislation, bankruptcy administrators shallobserve the principles aforesaid separately when they exercise the right to dissolveexecutory contracts.In addition, the right to dissolve executory contracts of bankruptcyadministrators shall also be restricted in the following aspects: first, the restriction of “the scope of executory contracts”. Executory contracts are the contracts that are notor not fully executed by bankrupt or the other party. The contracts which are fullyexecuted by one party or parties shall not be contained in the scope of executorycontracts, and the bankruptcy administrators shall not terminate them.“Fullyexecuted” means the master obligations and the accessory obligations of thecontracts are all executed. Legislation and theory in China adopt the definition of“the scope of executory contracts” aforesaid, but juridical practice adopts differentdefinition. It is debatable, if the verdicts based on the different definition are justiceand reasonable. Second, the restriction of “dissoluble scope” in contracts law. Thecontracts which shall not be terminated in accordance with contracts law shall alsonot be terminated in bankruptcy law, i.e. bankruptcy administrators shall notterminate unilateral contracts in the event that the bankrupt is a creditor and non-debtcontracts. Third, the restriction of special type contracts, including contract ofguaranty, contract of ownership reservation, lease contract, IP lisence contract, laborcontract and life insurance contract. The restriction in contract of guaranty is goodfor achieving the policy goal both of bankruptcy law and guarantee law in the casethat guarantor goes bankrupt; The restriction in contract of ownership reservation isgood to prevent big loss of the buyer in the case that the seller goes bankrupt; Therestriction in lease contract is to continue the special protection in non-bankruptcylaw in the case that the lessor goes bankrupt; The restriction in IP lisence contract isto protect technological innovation, The restriction in labor contract andlife insurance contract is specially to protect labourers and insurants. View fromrestriction system of bankruptcy administrators’ right to dissolve executory contracts,contract of guaranty, lease contract and IP lisence contract need to be furtherprovided by judicial interpretation for the purpose of improving the restrictionsystem of bankruptcy administrators’ right to dissolve executory contracts in China.
Keywords/Search Tags:insolvency administrator, termination right, executory contract
PDF Full Text Request
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