Recognition And Handling Of Cases Of Disputes Over Private Lending

Private lending is a kind of informal financing form, which is not used in the before loan of formal financial industry and non-governmental.It is a product of the economic and social development to a certain stage. Nowadays, our country’s private lending market development is really rapid, that because many enterprises especially those small and micro enterprises have no sufficient and effective mortgage property, so that it is really hard for them to obtain loans from formal financial institutions, meanwhile, there are plenty of private capitals chasing profits limited by narrow investment channels. They happen to coincide. Private capital is gradually shifted from the initial consumption of life and simple production to the investment of commercial loan, private lending has great scale and number, resulting in increasing disputes, in those conditions, a large number of private lending disputes taken to the court, so the number and types rise up, the diversification trend is apparent.For a long time, our country have no systematic standard for private lending just scattered in the "general rules of the civil law" and "contract law".there are only a specialized judicial explanation issued by the Supreme People’s Court promulgated "on the people’s court in the trial of cases of borrowing, a number of opinions" (hereinafter referred to as the case opinions on lending)in 1991,which has seriously lagged behind the economic development, and could not adapt to the need of the current trial. In that case, the Supreme People’s court issued the latest trial of a number of issues relating to the application of the law of private lending cases (hereinafter referred to as the provisions of the case of private lending)in August of this year, to guide the new period of civil lending disputes trial.China’s private lending is different from the traditional with many new features, mainly embodied in increasingly complicated, diversified aspects, what’s more a group of professional lenders appeared.private lending interest rates are higher and higher, some also have a strong concealment; many cases of the defendant’s whereabouts is unknown, service cycle is long, so it is really difficult to implement the case,some even constitute criminal offenses.In the process of trial, there are a lot of false litigation, and the parties take a variety of means to confuse the public,interfered with the judge, attempted to reach its illegal purpose. At this time, the people’s court in the trial of such cases should raise vigilance, the conclusion of the loan contract, the location, the contents of the contract, the delivery of loans and other details to fulfill the obligations of strict scrutiny to prevent its damage to legitimate creditors and the interests of third people.Interest problem is the core problem in the case of private lending disputes, and how to deal with it is critical in the case of the trial of private lending. The Supreme People’s Court issued the latest issue of the application of the law on the application of several issues of law (hereinafter referred to as the "private lending case") on the borrowing rate is a unified line model, that is, the annual interest rate of 36%, the two sides agreed to more than 24% of the annual interest rate, if the borrower has been in accordance with more than 36% of interest, can be required to return the loan.Contract is a contractual relationship, should fully respect the autonomy of the parties, so the usual private lending contracts are legal and effective, both parties should be in accordance with the contract and have the corresponding rights and undertake corresponding obligations. However, the private lending contracts in many cases would be invalid, once the contract is confirmed invalid, it is related to the return of the loan principal and in accordance with the extent of the damage,compensation and other issues.This paper aims to analyze and elaborate the identification and treatment of the disputes from the above four aspects, so that we can have a general understanding of the private lending.