The Classification Of Agreements On Paying A Debt In Kind Assets

Paying a debt by kind assets is an agreement, which requires another kind of payment (usually a specific substance) instead of the original payment (usually money) and legally eliminates the debt. Depending on the time of occurrence and its manifestations, it may cause confusion with other kinds of agreements such as datio in solutum, liquid mortgage, alienation guarantee and so on. This paper aims to classify different kinds of agreement with the contents of paying a debt by kind assets based on analyzing written judgments both sides of the Strait and points out that:According to the theory of distinguishing act of disposition and act of burden, it can be divided into "behavior that is only based on acts of burden" and "behavior established on both act of disposition and act of burden".In the former, if the agreement is reached before the amortization period, it will be defined as liquid mortgage. Otherwise, the declaration of both parties will be taken into further consideration. That is, when the parties mean to change the subject of the debt, it is the change of debt; while if the parties’meaning is unknown, it is the new debt settlement. In the latter, the classification shall be determined in accordance with the purpose and time of ownership transference of the object. If the transfer of ownership is temporary and aims at guarantee the debt, it will be defined as alienation guarantee. While, if the transfer of ownership of the object is permanent and with the purpose of paying off debt, it will be seen as datio in solutum.On this basis, further research on the validity of each kind of contract will be done in order to make a useful reference for the judicial practice.