An Analysis Of House-for-debt

Creditor and borrower sign house trading contract under the contract of loan,making agreement that once the borrower can not repay the loan on time,then preform the house trading contract to offset debt.In the name of “dealing”,in fact “debts repaying”.In this situation,it's not transfor guarantee or later transfor guarantee.Even not a simple conditional trading,but a conditional “datio in solutum” agreement.It also should be under control of the fluidily clause.It's not only possible to reflect the “guarantee function”,but also to prevent the parties from circumventing the disguised from of loan and leading by house-for-debet agreement,which is accompanied by the “Liquidity Contract Freedom + Clearing Doctrine”.The Supreme People's Court tried to figure out the legal nelotion to seek the solution through the article 24 of the Judicial Interpretations on Private Lending.However,due to lack of investgation on the constitution of real estate transfor guarantee and the neceseity of setting in China.Leading not on unsatisfied result in definition and solution.House-for –debt agreement has only “guarantee function”.It can neither become the “real rights granted by way of secunity” nor to enjoy the “priority right to be repaid”.As s result,the term “agreement” in article 24 of the Judicial Interpretations on Private Lending should better be regardeal as a guarantee funtion.