The Exercise Of The Right Of Legal Set-off: Study On Article 99 Of Contract Law

As one of the causes for terminating a debt, the exercise of the right of legal set-off is closely connected with parties' interest. It can not only simplify the transaction and save the cost, but also has the function of guarantee. However, the legal set-off system mainly exists in only two relevant provisions in Chinese Contract Law and it is reflected in practice that there is no related definite rule. As a result, the exercise of the right of legal set-off is restricted in practice, and the function of the legal set-off system hasn't played the important role what it should be in the economic activities. This paper makes a detailed and systemic research on the exercise of the right of legal set-off, attempts to find reasonable rules through comparison and reconsideration of the laws of several countries, and through self-criticism of laws and regulations with regard to assisted reproduction in our country. I hope the system will improve in the future.The text is divided into five chapters, besides foreword and conclusion.The first part is mainly about the basic theory of legal set-off, including its concept, classification, development, nature and function. The right of legal set-off derives from Roman law, and its nature is the right of formation in our country.The second part focuses on the requirements of the exercise of the right of legal set-off, including positive requirements and negative requirements.The third part studies the exercising method of the right of legal set-off, emphatically analyzes the exercising method in civil procedure. This paper points out that the exercise of the right of legal set-off in civil procedure is the extension of the substantive right, and it makes no sense to distinguish the right of legal set-off outside the court and in the court. As one of the defences, the right of legal set-off can be freely exercised without suing or counterclaiming. Besides, the paper also studies the exercising term of the right of legal set-off.The fourth part analyzes the effect of the right of legal set-off. Since our country adopts the theory of the retrospective set-off, the excise of legal set-off has the retrospective effect. In addition, the paper further discusses the relationship between the excise of legal set-off in civil procedure and res judicate. In spite of the objective scope of res judicata in civil judgment is restricted in the text of the judgment, but the civil law system makes an exception for the defence of set-off. It is worthy to be learned by our country.According to the problems of Chinese legal set-off system, the fifth part is a deep thinking on how to perfect the legal set-off system in China. With regard to the exercise of the right of legal set-off, this paper suggests to enrich its positive requirements, to increase its negative requirements, and to enact res judicate of legal set-off and so on.