Remedy Of The Lessor’s Rights In Financial Leasing Contract

Financial leasing is a new type of financial service with double functions of financing and leasing. Since it was born, it was loved by the market, and it is the second important means of financing compare with the bank loan in western countries, which is called the improver of new economy. Financial leasing industry has made great achievements in China since it has been introduced in the early 1980 s.Now it contains the three categories companies, domestic companies, foreign department(including joint ventures), the companies are charged by banks. At present, it has covered areas of health,education, energy conservation, engineering printing, etc. and it keeps rapid development, However, it still have a huge gap in the finance lease transaction size and permeability compare with the western countries.A financial leasing contract is a contract whereby the lessor, upon purchase of the lessee-selected lease item from a lessee-selected seller, provides the lease item to the lessee for using, and the lessee pays the rent. A complete financial leasing transaction requires tripartite bodies, organic union of the two contracts. Where the lessor enjoys the ownership of the lease item, and achieves its financing objectives by leasing items. He plays a core role in the transaction,which related to the development of a financial leasing industry as a whole. However,in fact, the lessor purchases the leased property according to the instructions and choice of the lessee, the lessor only has formal ownership of the leased property, while the lessee often uses long-term possession of the leased property, so the lessor’s right is vulnerable, and face the lessee defaults,bankruptcy, and many other risks. The realization of the purpose of financing in lesssor depends on the lessee to fulfill obligations. In practice, the lessee often in violation of the obligation to pay the rent and keep the property, the fluctuations of the market economy make the lessee’s bankruptcy inevitable. Whether it could be achieved effective protection of the lessor’s rights related to financial leasing industry’ development is healthy,orderly, legal and institutional or not.This paper take the remedy of the lessor’s rights as the research perspective, combine with the transaction process and the emergence of problems in practice, learn through comparative analysis method,then making some legal and institutional suggestions on the protection of the right proposal in lessor, thus minimizing the risk of the lessor, and giving full and effective protection of lessor’s rights.In addition to the introduction and conclusion, the article is divided into four parts.The first part is a general introduction. Firstly, define the concept of financial leasing contract, point out the finance lease contract is different with a traditional lease and installment sales contracts. it is an independent and new form of transaction. There are complex legal relationship, long term financing and leasing characteristics. Secondly, the rights enjoyed by the lessor are introduced, point out its ownership of the lease, the rent charged right, right to terminate the contract, the right to recover damages and other legal rights.in accordance with the form of ownership and enjoyment of the leased property with the fact that long-term use by lessee possession, draw its right is vulnerable. Finally, according to the rights and obligations of the lessor. combine with judicial practice, the abuse and the risks are faced by the lessor have three aspects. the leessee does not pay the rent, the leessee dispose of items without rights, the leessee’s bankruptcy.The second chapter to the fourth chapter is the core part of the article, the paper analyze the lessor’s right relief in the above three aspects. The second chapter mainly analyzes the remedy of lessor ‘s right when the lessee fails to fulfill its obligations to pay the rent.Firstly, point out that the lessee failed to pay the rent constitute a breach of contract, according the provisions of the relief to the lessor in current law, points out three aspects of problems. the accelerating pays the rent’s reasonable period is not clear, the right of reclaiming is not clear, and judicial interpretation provisions are conflict. Secondly, compare with the relevant national legislation and practice, the accelerating pays the rent’s reasonable period is analysised, point out that the rules should be in material breach of contract provisions, the definition of a reasonable time could draw lessons from the judicial interpretation stipulation for termination right; cntent retrieval and damages after the termination of the contract and the relationship between the rent to pay is analysised. The reback of the item is the performance of the ownership.it should be included the reback of self-reliance back and force to bring back, the scope of damages must have certain calculation standard; The existing legal reason between the risk burden and termination of the contract terms is analysised, points out that the two rules have no discrepancies, but the end effect on the difference should be changed from the compensation benchmark. Finally, through the above analysis, this paper puts forward the advice about three aspects. the transition to do well for a reasonable time and, complete retrieval system should be builded. and the compensation of the risk burden changes to rent.The third chapter mainly analyzes the remedy of lessor ‘s right when the lessee dispose the items without rights.. Firstly, this paper expounds the reality situation and the consequences about disposing the items without rights. according to the regulation of the current legal relief of the lessor, point out three aspects of problems. the punishment is not enough, the registration system effectiveness level is not high and the judicial interpretation’s barriers in reality. Secondly, compare with the relevant national legislation and practice, analysis the lessee’s disposition and goodwill of the third person. point out that the lessee’s behavior of dispose items is subjective malicious tort, brought great damage to the lessor. One of the reasons that cause the third person in good is related to the financing lease registration; Compare the financing lease transaction registration system with related systems. points out that the financing lease transaction registration is different from the traditional property registration, it is a creditor’s rights declaration, so the publication of the registration of the public should have enough credibility, and registration of public summons has its necessity and feasibility. Finally, through the above analysis, put forward to increase in the legislation of responsibility to the lessee to dispose of item without rights. and shall be included in the criminal regulation depending on the severity. Base on existing public platform, establish a unified financial leasing transaction registration system, and endow it the public credibility.The fourth chapter analyzes the remedy of lessor’s right when the lessee is bankruptcy. Firstly, describes the of lessee’s bankruptcy risk is relatively high. and some risks are faced by the lessor, according to the regulation of the current legal relief of the lessor, point out the relief of the lessor is too principle, when the lessee bankruptcy, the lessor’s right to terminate the contract and exercise retrieve are facing conflict among administrators, in judicial practice, the court delays ruling. Secondly, compare with the relevant national legislation and practice, analysis the economic substance of the method application in bankruptcy, point out that the ownership of the leased property during bankruptcy should not be attributed to a claim ownership of the lessor blindly. When identified and the nature of ownership of the leased property, it shall be vested in accordance with the parties to the lease agreement, the two sides’ rights and obligations,the rent constitute and other factors. Make comparative analysis on the right to terminate the contract and the managers right to choose, pointing out the different stages of the lessor should enjoy the right to rescind the contract, but in the conflict with the manager’s right to choose, the lessor need to make a choice based on its own interests; Make comparative analysis on the choice of the right to retrieve and the managers right to choose, it should be cleared that the right to retrieve is an extension of the right to recover the insolvency of ownership, and analyze retrieved from practice restrictions on the lessor’s stakes. Finally, through the above analysis, propose to establish a special legal regime lessee’s bankruptcy, insolvency clear lessor in the leased property ownership, debt and the conditions and rights management exercise. a special system of bankruptcy courts and judges should be established. In practice, the lessor and the industry should establish a sound risk control mechanism.