Research On The Object And Risk Of Factoring Contract In The Civil Code

Legislators included factoring contracts as a typical contract in the Civil Code of the People’s Republic of China,which not only meets the needs of the development of my country’s factoring industry and optimizes the business environment,but also establishes a scientific legal system for the settlement of factoring contract disputes.The current law only states that the object of the factoring contract is the existing and future accounts receivable instead of regulating the actual assignment of accounts receivable,which is the core of the factoring contract.Therefore,based on the legal norms of factoring contracts,it is necessary to analyze the object of the contract and make recommendations on the legal risks in the assignment of accounts receivable.Starting from the basic system of factoring and the legal structure of factoring contract and combined with the types of factoring contracts regulated by Articles 766 and 767 of the Civil Code,we can clearly realize the fatoring contract that the creditor transfers the existing or future accounts receivable and at the same time the factor should provide at least one specific financial service among the four items specified in Article 761 of the Civil Code.In addition,the legal nature of the factoring contract belongs to the mixed contract.From the perspective of accounting,we intend to consider the concept of accounts receivable in the United States Uniform Commercial Code recognized by the general theory.The definition of my country’s accounts receivable is a kind of payment request right.From the perspective of interpretation theory,it is interpreted that bill claims and ordinary claims belong to the scope of existing accounts receivable,in this regard,accounts receivable should be defined as contractual claims generated by the enterprise.In accordance with the provisions of Article 545 of the Civil Code,the regulations on the prohibition of assignment of creditor’s rights are applied to further affirm the legitimacy of the creditor’s rights of bills attributable to the object of the factoring contract,instead of the existing creditor’s rights arising from the business activities of the enterprise shall not be the object of the factoring contract and the parties agreed to restrict assignment clauses and must not oppose the factor.Through the perspective of the current status of the transfer of accounts receivable,it can be found that the legislation on accounts receivable is too general,which is not conducive to practical operation.Therefore,legislator should separately define the scope of future claims with existing basic relationships,future claims without basic relationships,and the scope of charging rights.Besides,make it clear that future claims with existing basic relationships and charging rights that can be identified as such belong to range of the future accounts receivable.However,future claims without basic relationship and such charging rights as the object of factoring contracts are more risky,but based on the principle of autonomy of will,it should be clearly ensured that the factor can still do factoring business.Combined with Articles 763,764,765 and Article 768 of the Civil Code,there must be reasonable estimate about the legal risks related to false accounts receivable,basic transaction changes,accounts receivable notification system,and conflicts caused by the transfer of accounts receivable.For this reason,the factor needs to take some measures to prevent certain legal risks in the transfer of accounts receivable.For example,the parties related to the factoring contract can adopt the form of electronic factoring contract or three-party co-signing factoring contract.The factors need to know the basic transaction content,conduct formal review,select the type of factoring contract with recourse preferentially,clarify the liability for breach of contract,exercise of notification and registration rights in time.