Study On The Nature And Effectiveness Of Debt-for-property Agreement

Due to the lack of regulations in laws and judicial interpretations on agreements of debt repayment by delivering goods,the legal application and theoretical research of such agreements are chaotic,resulting in numerous disputes over the nature and effectiveness of such agreements.In order to achieve unified judgments,this paper examines the nature and effectiveness of agreements of debt repayment by delivering goods through the controversies in the construction contract disputes between Guangsha Cooperative and Chengjian Second Company,Tongzhou Jianzong Group Case,and Suolang Company vs.Yao Moumou Case.The following viewpoints are proposed:The definition of agreements of debt repayment by delivering goods should be consistent with the definition method in the Contract Compilation of the Civil Code,which defines such agreements as contracts whereby the creditor obtains payment by receiving goods as a substitution for the debtor for the purpose of satisfying the old debt.The nature of agreements of debt repayment by delivering goods should follow the principle of autonomy of the parties and should respect their intentions.Agreements of debt repayment by delivering goods reached after the deadline for debt payment imply changes in debt or new debt repayment.In cases of new debt repayment,neither the creditor nor the debtor has the right to choose between the old and new debt for fulfillment.Agreements of debt repayment by delivering goods made before the deadline for debt payment are not regarded as liquidation agreements or pledges,and therefore,do not constitute valid agreements.The rules for the effectiveness of agreements of debt repayment by delivering goods made before and after the debt payment deadline should be unified,and both imply changes to the debt or new debt repayment.If the value of the goods significantly different from the original debt,the debtor can exercise the right to withdraw.The subsequent interpretation of the General Principles section of the Contract Compilation of the Civil Code should include regulations on agreements of debt repayment by delivering goods,summarize the achievements of judicial practice and solve problems of uncertainty in recognizing such agreements,and provide stable expectations for parties engaged in market transactions.