On The Legal Effect Of Transfer Guarantee In Private Lending

With the increasing prevalence of private lending,signing a transfer guarantee to ensure the security of lending relations has become a trend,but this also results in more and more disputes.In judicial practice,the results are different.The newly promulgated provision,“Provisions of the Supreme People’s Court on Several Issues concerning the application of law in the trial of cases involving private lending”(hereinafter referred to as “Judicial Interpretation of Private Lending”),the article 24 makes the provisions for hearing private lending disputes.However,the determination of the nature and validity of the guarantee is not clear,which leads to the lack of uniformity in the outcome of such cases in judicial practice.In this paper,the guarantee is equal to the creditor’s right.On this basis,this paper points out the issues of determination of the nature and validity of the guarantee,and points out the deficiency of the recognition of the guarantee under the judicial interpretation,and puts forward some suggestions to make it more perfect.This paper is divided into five parts.First of all,an overview of the guarantee is given.Then,the viewpoint that the guarantee is equal to the creditor’s right is put forward by comparing the theory of ownership with that of security right.In the next part,the issues of determination of the nature and validity of the guarantee are pointed out,and the paper explains that there are deficiencies of the recognition of the guarantee,and points out the importance of the determination of its legal effect.And then,discusses the imperfection of Article 24 of the Judicial Interpretation of Private Lending.And puts forward the deficiency should be made clear and perfected.In the end,the paper gives the recommendations.First,the effect of the guarantee should be clearly defined,and the right of the lender and the third party should be supplemented.Second,publicizes the guarantee by following the pre-sale registration system.By addressing the issues,the risk of private lending can be effectively prevented,and the security of it will be improved as well.Since then,the interests of creditors and third parties can be protected better than before,and the demand of market lending will be satisfied,and the development of market economy will be promoted.