The Theory Of The Factoring Impact On The Traditional Theory Of Creditor’s Rights Transfer And Change

Factoring system which has a long history played a role in the development of theworld legal civilization. As a new trade settlement, factoring includes various businesssuch as accounts receivable collection and management, trade finance and creditguarantee. Factoring gradually plays an irreplaceable role in the modern economic,social and financial practice. In legal nature, factoring has deep origin relations withthe traditional assignment of creditor’s rights. But as a new trade settlement, factoringis bound to attack the traditional assignment of creditor’s rights.The generation and practice of factoring business have formed a theoreticaldilemma, both in connotation and extension of the traditional assignment of creditor’srights theory. Factoring has greatly expanded the range of the classical theory of thecreditor’s rights assignment, so it has challenged the traditional assignment ofcreditor’s rights theory. The object of the traditional assignment of creditor’s rights hasalso suffered, because the factoring business not only covers the object of traditionalassignment of creditor’s rights, but also widens its scope. Factoring also impacts theinternal validity and external validity of the traditional assignment of creditor’s rights.Parties, interest demands, the behavior of the parties have changed, and the conflict ofrights has followed, and the priority issues have come about. At the basic level, thediscussion on these issues has indicated that the factoring formed a breakthrough in thetheory of traditional creditor’s rights. Facing to the impact and breakthrough, the lawshould give a response. The best response is the reform of legal system.Viewed from the perspective of legal reform, the development of the factoringbusiness has a need for changes of the traditional assignment of creditor’s rights theory,because every kind of social practice will generate a pressure on present legal system.Factoring business initially followed the system of creditor’s rights assignment in thecivil law, and a lot of behaviors in factoring business can regulate and solve accordingto the rules of the creditor’s rights assignment. If the new behaviors comes out, thetraditional theory appears to be inadequate, thus factoring requires institutional reform.Specifically, because of the special nature of the factoring business, it claims to allowthe expanded explanation of the traditional theory and system of the creditor’s rightsassignment, so that we can regulate factoring without undermining the present system.Regulating factoring through the special law exists abundantly in the international law. But the existing convention of legislation has provided factoring a fixed legal position,and it has improved and regulated gradually in practice. States shall separatelyformulate law to complete the legal regulation of the factoring system, according totheir respective national conditions. On the whole, the attack of the factoring to thetraditional assignment of creditor’s rights is abound to lead a legal reform. The socialdevelopment and the prosperity of the international trade need the law not only solvepractical problems but also act as an institutional safeguard. As the model of variousnew economy, new trade and new financial, which has formed in the development ofmodern society, factoring has impacted the national economy and internationaleconomy in the world. And it has gradually formed a positive factor in promotingsocial development. How to deal with these problems and the related legal system? Wehave to face. Discussion on these issues is not only a science inquiry, but also aresponse to a new kind of thinking and system, and it is the responsibility of neweconomic life mode as well.