Analysis And Discussion Of The Legal Issues Regarding Performance Bonds

With the rapid development of China's economy, evidenced by the continuous increase of GDP and GDP per capita, the consumption structure of Chinese people also commences upgrading from a clothing-and-food-focused structure to a housing-and-traveling-focused structure. The consumption structure is gradually moving into a higher level. Credit consumption means the supply of credit to consumers by the businesses or financial institutions. Before this general background credit consumption has been developing with a fast pace. However, the rapid development of credit consumption also brings emerging credit risks. It has in fact become a critical issue for the development of credit consumption regarding how to prevent and resolve such credit risks. As a result, performance bonds came into being. In this sense performance bonds is a lubricator for the development of credit consumption market.This thesis starts with performance bonds, a typical type of bonds, and researches and discusses the relevant issues in four parts in a relatively complete, systematic and thorough way. This thesis includes four chapters: the first chapter is on the general introduction of bonds; the second chapter is on the analysis of the legal nature and legal relationship of performance bonds; the third chapter is on the analysis of the legal issues in the practices of performance bonds; and the fourth chapter is on the improvement and completion of the performance bonds system.Chapter One of this thesis generally introduces the origin, features and classification of bonds insurance contracts. Regarding the origin, the reasons that bonds insurance is created are explained from the perspective that the disadvantage of guarantee is overcome. Regarding the features andclassification, the special nature of the risks of bonds is stated in the comparison between bonds and normal insurances. Then with the classification of bonds insurance comes the introduction of performance bonds which focuses on the importance of performance bonds in all bonds insurances and indicates that the discussion hereunder will revolve around the performance bonds.Chapter Two of this thesis analyzes the legal nature and legal relationship of performance bonds. Firstly the significant sense for determining the legal nature of performance bonds is clarified, and the legal nature of performance bonds is analyzed by comparing with the guarantee contract. Secondly the legal relationship of performance bonds is analyzed from the aspects of subject, object and contents, and in stating the subject of performance bonds the insurable interests of performance bonds are also discussed.Chapter Three dissertates the practical legal issues of performance bonds in details by focusing on the balance insurance liabilities, subrogation rights, and litigation procedures, and brings forward the specific solutions. First of all, with respect to balance insurance liabilities of performance bonds, this thesis refutes the current practice that the insurer obtains the advantages from both guarantee and insurance, and addresses the reasonability and feasibility of the existence of balance insurance liabilities and denies the counter-guarantee issues. Secondly, regarding subrogation rights, the features and nature of subrogation rights of performance bonds are highlighted in comparison to the subrogation rights system under normal insurances. In the end, this thesis discusses the relevant issues regarding the litigation under the current legal framework from the aspects of determination of cause of action, litigation subject, trial method, exercise of right to defense, and application of laws and determination of insurance accidents.The last chapter of this thesis, on the basis of the analysis of the embarrassing situation of performance bonds, brings forward ideas on the improvement of performance bonds in the ways of insurers' risks prevention, establishment of individual credit system and restructuring of legal system.