Forfeiting Legal Analysis Of China's Law Of Negotiable Instruments Institutions

Forfaiting, which is also called discounting the negotiable instrument withoutrecourse, is a long-and-mid-term trade finance created by the Swiss Bank AssociationZurich after the World War II.It usually adopts the fix interest rate and is characterizedas flexible by the finance term ranging from 180-day up to 10-year.Therefore, it hasdeveloped very rapidly since it was introduced to China in the middle of 1990's in thelast century. However, the legal study on forfaiting is still in the quite primary stage,which disadvantages the improvement of forfaiting in China. The article focuses onthe relevant legal issue of forfaiting and the respective modification of Chinanegotiable instrument law in a hope of affording some idea for domestic legalresearch.The article is composed of four parts. Beginning with the concept and origination offorfaiting part I abandons the former summary of the forfaiting legal characteristicsfor the reason that it mixes the legal characteristics with the transaction characterstogether and generalizes a conclusion that the forfaiting has 3 legal characteristics and4 transaction characters. Part II makes use of the right-obligation mode of the legalrelationship theory to analyze the relationships in forfaiting and also discuss 2 corelegal issues: non-recourse and the guarantee. Such discussion involves the nature, thecontent, the subject and the exception of the non-recourse theory and 4 regular sortsof the guarantee in forfaiting with their respective legal characteristics. Part IIIintroduces the suitable domestic circumstances for forfaiting and looks back on thedevelopment course of forfaiting in China by the ample materials and statistics. Thenit points out the limitations existing in China negotiable instrument law. In the lastpart, the author argues the way to amend a few stipulations on the valid sorts ofendorsement and the applicable law for the foreign-related negotiable instrument.