The "Deducting For Outstanding Loan" In The Comparative Perspective Of German Laws

Since the relevant financial laws in our country allow the commercial Banks to implement private relief named "deducting for outstanding loan" against customer,there're always banks that deduct customer's deposit out of proper motion to pay off overdue loans in practice,but the inequitable status of transaction usually causes disputes.To avoid those disputes,the legal basis for this kind of behaviour could be deemed as the set-off system stipulated in Article 99 and Article 100 of the Contract Law.The set-off system in civil law is a convenient and quick remedy for banks to protect themselves,and it also enables banks to withdraw loans from their customers effectively to guarantee the realization of its own right.However,there is no such concept or definition of "Bank's right of set-off"in China,neither in terms of legislation nor judicature.At present,the theory,claiming that the set-off system is the theoretical basis and legal basis for the action of "deducting for outstanding loan",is still in the period of discussion.And judging from this,there are no relevant laws or regulations currently to support the theory.Therefore,irrespective of previous appointment in contracts with customers,the action of "deducting for outstanding loan" by banks cannot quote the set-off system in the Contract Law,which has also caused a lot of inconvenience in practice and increased litigation costs on both parties.Germany,which is also a continental legal system,has established a complete system of right of set-off between banks and consumers.The relevant trading practices have also become mature in practice.The customer's right of set-off is stipulated in the AGB(standard terms in Germany)of banking,the banks' right of set-off is governed by the set-off system in the German Civil Code.Together it forms the basic law system to control the action of set-off between banks and consumers jointly,namely the German Civil Code article 387 et seq.as well as the AGB.By studying the set-off system between banks and consumers in Germany,the reason for the legal character and the theoretical support could be found to adopt the system of bank's right of set-off in our country.In addition to the study on the legal character of banks'action of "deducting for outstanding loan",this article also compares the AGB in Germany with the standard terms in China.Through the comparison of Article 39 in the Contract Law and Article 305 in the German Civil Code,the differences between the concepts and the rules of inclusion could have some significance for the legislature and the judicial practice.What needs to be explained in advance is that this paper only deals with the transactional relationship between banks and consumers,not studying the transactional relationship between banks and corporations,enterprises and other non-natural persons.