Explanation And Reflection On Sales Guarantee Contract

Sales guarantee is a common form of guarantee in the field of private lending in China.Sales guarantee contract with an effective condition(hereinafter referred to as “SGCEC”)plays a vital role in granting credit,therefore contributing to facilitating loan issuance and retrieving claims.In the private lending market,a sales contract subject to effective conditions,which has the nature of guarantee,has usually been concluded in addition to a loan contract.This kind of contract enjoys popularity among creditors and debtors due to its vague purpose,wired structure as well as its strong guarantee effect.It has also attracted the attention of legislation,judiciary and doctrine.This paper will explain and reflect on the nature and effectiveness of aforementioned atypical contract.The first two chapters focus on the legal nature of the SGCEC,while the last three chapters focus on the effectiveness of the above contract.The first chapter compares the SGCEC and transfer guarantee mainly by the way of system comparison.By analyzing the basic legal relationship of the SGCEC,the author concludes that the SGCEC is different from the transfer guarantee in the timimg,degree and purpose when subject transfers.The SGCEC is also different from transfer guarantee in the form of sales contract.The obvious distinction between two patterns is whether there exists an independent loan contract.In the meanwhile,it will also exert an adverse impact on the legislation if we treat the SGCEC as a kind of transfer guarantee in a broad sense.The second chapter reveals the similarities between the SGCEC in China and pre-registration guarantee contract in Japan.This chapter elaborates the development history of pre-registration guarantee contract in Japanese law.The author try to state the universal doubts and challenges of justice and doctrine to such contracts in both China and Japan by introducing tortuous development process of pre-registration guarantee contract.Then this chapter explores the subtle differences in varies of such contracts and introduces the coping style facing these differences in Japan.Preregistration guarantee contract is a general but vague concept.This kind of contract can be concluded in many different forms,such as in the form of a sales contract subject to effective conditions,as well as a pre-contract of substitute liquidation before the term of payment.This chapter is aim to correct cognition regarding the concept of these atypical guarantee contract in China,reflecting on the relationship between various of pre-registration guarantee contract and the SGCEC.In the third chapter,the author introduces several factors that may make the SGCEC null and void in traditional civil law.Judges in China tend to criticize this kind of contract due to false expressions of intention while judges in Japan ignore the expressions of intention but consider the contract as a violation of the principle of public order and fine custom.This interesting distinctions eventually leads them to opposite fate.The author refutes the view that the SGCEC is false expressions of intention between two parties.Then the paper introduces and reflects on the Japanese judicial viewpoint between the pre-registration guarantee contract and the principle of public order and fine custom.In addtion to above reasons,fluid forbidden is another objection to the validity of this kind of contract.Although it is well recognized that creditors has the opportunity to rake in exorbitant profits if the debtor fails to pay the debt when they entered into a SGCEC,which in fact gives rise to the same legal effect as fluid,it is wise to establish a flexible rules rather than apply the fluid forbidden rule,rigidly and Mechanically,without distinction.The fourth chapter mainly introduces new measures in Japan to adjust the SGCEC.The author try every effort to tell readers that the real problem in the SGCEC is that its means of guarantee exceeds its purpose.The surplus means of guarantee lead to overguarantee,a common economic phenomena that endangers the economic freedom of the debtor and also damages to the interests of other creditors of the debtor.When talked about the principle of pubic order and fine custom in the SGCEC,it actually means overguarantee phenomena caused by this kind of contract.On the basis of this idea,Japanese has established a complex and sophisticated rules to impose obligation of liquidation on the creditor.We also established a little similar but incomplete rules in China.After comparing,the author not only criticizes the existing liquidation rules in China,but also makes necessary reflections on the Japanese way.A good liquidation system is able to keep the SGCEC alive and balance the interests among the debtors,the creditors and other interested parties.On the basis of the previous chapter,the fifth chapter of the paper is going to discuss the external effects of the SGCEC.It is pointed out that this kind of trade structure has the possibility to become the real right for security due to its strong guarantee function.However,the lack of suitable public summons impedes its further development in China.In this part,the paper disscussed the legal effect against the third-party to SGCEC.The author introduced the social and legal background of pre-registration guarantee contract in Japan,and reviewed the “third-party influence” of SGCEC in China,and analyzed such judicial disputes in China.Then the author called on China's legislature to reflect and criticize on the basis of drawing lessons from the Japan.The second half of this chapter fueled to deepen this discussion,and revealed the complexity of the external effects of the preregistration guarantee contract when the interested parties involves.In the end of the paper,the author suggests that it is able to draw lessons from Japan and combine the advance notice registration system in China to recognize the security right created through the SGCEC and registration.