Commentary On The Series Of Fictitious Accounts Due In Factoring Contracts

With the continuous development of the economy,enterprises need to improve the utilization rate of their assets,revitalize curr ent assets,and promote the recovery and utilization of receivables for their own development and growth.Therefore,factoring services that provide financing,sales account management,and account receivable collection services are favored by enterprises.The international factoring business launched by Bank of China in 1987 has made factoring gradually enter the public eye.After continuous development of factoring business,China has become the world’s largest factoring market in 2011.However,what does not match the rapid growth of factoring business is that there is still a large gap in the regulation of factoring contracts in China’s legislative level.The court has invoked different laws and regulations cited by factoring in factoring contract disput es,leading to similar judgments and different decisions.Has negatively affected the development of factoring business.By integrating cases concerning factoring contract disputes in recent years,creditors and debtors fictitious accounts receivable to de fraud factoring financing funds is one of the more common situations in factoring contract legal disputes.The court mainly has the following three dispute points when handling such cases: how to determine the validity of the factoring contract when the ac counts receivable are fictitious;whether the factorer has performed its duty of review and attention;whether the guarantee contract signed by the guarantor and factoring agent effective.First of all,the factoring contract is a civil contract signed on the premise that the creditor and the factorer transfer the accounts receivable.Therefore,the validity of the factoring contract should still be in accordance with the provisions of the "General Rules of Civil Law" and "Contract Law".The validity of the contract shall depend on whether the factoring agent knows the false expression between the creditor and the debtor and whether it exercises the right of cancellation;if the factoring contract does not have the invalidity of the contract provided for in Article 52 of the Contract Law,The factoring contract is a valid contract.When the claims of accounts receivable used for factoring financing applications are fictitious,the effectiveness of the factoring contract should be judged according to the relev ant provisions of Article 146 of the General Rules of Civil Law.Secondly,in order to ensure the safety of transactions and balance the interests of all parties,the factoring agency should conduct a substantive review of the true and legal validity of th e claims of the receivables rather than a formal review;finally,the validity of the guarantee contract should be distinguished from specific situations It can’t be considered that the main contract as a factoring contract is invalid,and the guarantee co ntract is invalid.In summary,while the factoring business is developing rapidly,both factoring financing applicants and debtors should follow the principle of good faith and provide real and effective materials for factoring financing business developme nt for factoring agents to review.Factoring agents should do their due diligence Fulfill its duty of review and attention.If the factoring financing applicant and the debtor provide false information and collude to defraud financing,they shall bear corr esponding civil.Finally,as the "Civil Code Contracts" meets the needs of reality,factoring contracts are included in the contract as a typical contract,and a special chapter is provided to regulate the factoring contract.Factoring business will usher in the spring of development.