Research On Our Country's Fluidity Contract System

The enactment of the General Principles of the Civil Law of the People's Republic of China in October 2017 marked the beginning of the codification of the Civil Law in China.The legislation of the branches of the Civil Law has been undergoing immediately and urgently since then.Under this circumstance,the legislation of the Guarantee Law should take the opportunity to improve the rules and address social issues.China's Guarantee Law does not mention business pledge which should be included in this legislation.The legislative model with absolute prohibition does no good for the market economy.It's unreasonable to prohibit the liquid contract system since the parties often avoid the liquidity contract by all means in order to facilitate the transaction and lower the cost.Both the in-house draft and the consultative draft of the Property Law keep changing the rule whether liquidity contract is allowed or not.The academia has been always appealing to lift the ban of the liquidity contract,which somehow receives little attention in the legislation.The current deposit for real rights is expensive to pay,which affects the efficiency and flexibility of the transaction.However,the liquidity contract system can reduce the cost of the deposit and guarantee the autonomy of the parties simultaneously,which can meet social needs better under the current market economy.For liquidity contract,a sudden change from absolute prohibition to absolute permission is not advisable.The liquidity contract should be publicized in order to clear the balance between the parties.When the debt is due but not paid,the creditor owns the deposit immediately,while the debtor or the guarantor is responsible for the burden of proof as to propose the payment.Additionally,the interests of debtors and guarantors can be greatly guaranteed by the revocability system stated in the General Principles of the Civil Law.The Civil Code's Property Rights Editing is suggested to amend the impropriate items in the Property Law and lift the current ban of the liquidity contract system.