Study On The System Of Legal Offset Right In Contract Law

The system of legal offset right is one of important systems in civil and commercial law. However, our country's "contract law" contains a few provisions on legal offset right system. The lack of legislation directly leads to legal application problems in judicial practice. The author investigates the historical evolution of offset and foreign related legislation; then analyzes the exercise way and effectiveness of legal offset right. Based on these analyses, the author puts forward scanty shallow suggestions on improvement of the system, in order to solve the defects of legal offset right system in contract law. The author expects this paper is beneficial to the improvement of legal offset right in contract law, which is the main purpose of the paper writing.This paper is divided into six parts:The first part investigates the historical evolution of legal offset right system. Through the investigation of the civil law system and the common law system, it is concluded that the applicable scope of legal offset right has the trend of gradually expanding and its value persuit more reflects the fair including social factors.The second part analyzes the concept and nature of legal offset right. Legal offset right is one right that one party making a mean express leads to offset. Its nature is right of formation.The third part analyzes the status and functions of legal offset right system. It is an independent reason of eliminate debt, and has convenient and save function, fair function, reducing debt disputes function and ensuring claims effectiveness, some extent of guarantee function.The fourth part analyzes the requirements of the foundation of legal offset right. First, it analyzes the positive requirements:two claims for the parties shall be valid exist; two claims for the parties shall mutually exclusive; the type and quality of both debts'subjects are the same; the initiative claims are over pay off period. Also other exceptions are analyzed. Then it discusses the negative requirements:debts can not be offset according to the law; debts can not be offset according to the nature of the contract; debts can not be offset according to convention. Attentions should be attached to that:the claim with right of defense does not affect the foundation of legal offset right. If there is initiative claim with the right defense, after one party exercising legal offset right, the other party exercising the right of defense only can hinder the exercise effectiveness of legal offset right. If there is passive claim with the right of defense, the debtor can give up the right of defense to enjoy legal offset right.The fifth part analyzes the exercise way and effectiveness. The debtor should make a offset mean to the other party, which can not attached with condition or deadline. But our country's "contract law judicial interpretation (2)" sets a deadline for balancing the parties' interests, so its exercise should divided into different situations:after the debtor exercise legal offset right, if the other party does not prosecute in agreed or reasonable term, the exercise effectiveness of legal offset right will occur when the two claims are suitable to offset; if the other party prosecute in agreed or reasonable term, it will be tried on court. If the court does not affirm the objection, the exercise effectiveness of legal offset right will occur when the two claims are suitable to offset, if the court affirms the objection, the exercise effectiveness of legal offset will not occur.The sixth part analyzes the defects of legal offset right system in contract law and perfect measures. There are some measures from the following aspects to solve the existing shortage. First, perfect the positive requirements of the foundation of legal offset right. Second, enrich the negative requirements of the foundation of legal offset right. Finally, specify the exercise way and effectiveness of legal offset right.