The Legal Risk And Prevention Of Lessor In Financial Leasing Contract

Financial leasing has a development history of over 30 years since its introduction into China in the 1980 s.With the improvement of supporting systems such as regulatory,legal,accounting and taxation systems,the financial leasing industry in China has achieved an explosive growth at the moment.The number of financial leasing contract disputes has been increasing year by year,but the legal system construction is not perfect.By analyzing the legal risks it faces,the lessor,as the most direct force to drive the industry development,can not only protect its legitimate rights and interests,but also benefit the long-term sound development of the industry.The concepts related to financial leasing in China are included in different laws and regulations and applied in parallel within their respective adjustment scope.A financial leasing contract possesses the dual features of both goods financing and funds financing,showing its own unique legal characteristics.Through analysis of about 20,000 judicial cases in recent years,the disputes on financial leasing contracts focus on the identification of contract validity,the problems of the leased property during contract execution and the disputes regarding contract termination.Among risks of the lessor,three issues are worth discussions: the risks associated with the identification of the relationship between the leased property and the financial leasing contract,the relevant risks obtained by a third party in good faith and the risks with regard to the contract termination.To prevent risks,it is necessary to proceed with the perspectives of both the practice of financial leasing transactions and the improvement of China's legal system for financial leasing.