On The Effect Of Fixed Profit Terms In Entrusting Management Contracts

The paper applied the principal theories of law,economics and statistics to explain the effect of fixed profit terms in entrusting management contracts in five chapters.Chapter one made clear the conception and classification of "entrusting management contracts" and "fixed profit terms" and briefly introduced the method of how the paper tackled the topic.Chapter two discussed the legal nature of entrusting management contracts by comparing the principal-agency relationship and trust and the advantages of applying trust into entrusting management contract.Chapter three first presented all the regulations referring to the fixed profit term and classified them in accordance with the types of trustee,which are financing institutions,non-financial institutions and natural person.After the summary of all the regulations,it then pointed out the loopholes and defects of the existing legislation.Chapter four carried out the empirical analysis of fixed profit terms' effect in legal cases by economical and statistical approaches and concluded several reasons that were commonly used to invalidate the fixed profit term and the analysis against them.At the end,it illustrated the disadvantages of invalidating the fixed profit terms by analyzing how the invalidations changed the trustees' motivation.Chapter five concluded the specific standards and logics of judging the effect of fixed profit terms in entrusting management contracts,which is combing the distinction of the trustee and the transaction structure of the deal and put the principle of contract freedom in priority.