On Liability For Warrant Of Defect Of Contract Paying Debts In Kind Assets

In recent years,the activity of market transactions has brought different kinds of ways for creditor to get rid of the "lock" effect of contracts,which presents various forms of "paying debts in kind assets".However,the loophole on the force of this kind of contract,its performance and liability,results in contradictory decisions in judicial practice.The liability for warrant of defect is one of the most important kind of liability for breach of contract.Yet,most studies on the contract of paying debts in kind assets concentrate on its nature,few on the liability of warrant of defects of debtor.Debtor’s liability for warrant of defect exists only when the contract is valid.The thing is,in the background of judicial practice and theoretical research in our country,the contract of paying debts in kind assets is not always valid,for the probability of breaking the law of prohibition of liquidity clause.In fact,even the contract of paying debts made before the performance period does not always embrace the character of guarantee,and should not be applied to the law of prohibition of liquidity clause which invalidates the contract.The validity of the contract of paying debts in kind assets enables the discussion on the debtor’s liability for warrant of defect.However,the diversity of this kind of contract determines that it would rather to discuss in types than generalize all.Considering the similarity between the contract of paying debts in kind assets and traditional rules in civil law like datio in solutum,new debt payment and substitute settlement,it’s better to classify the various contracts and apply to traditional rules of civil law.And the instrument had better be the will of parties as the contract of paying debts in kind assets is some kind of legal act by nature.Based on this,in the opinion of the author,it is not necessary to discuss the liability for warrant of defect involving the contract of paying debts in kind assets which was made in purpose of guarantee;and for the rest which was made for contract performance,can be divided into types of datio in solutum,new debt payment or substitute settlement in accordance with the party’s will of:whether to be bond by the contract alone,whether terminate the obligation under former contact.And when the new performance fails to conform to the clause of the contract of paying debts in kind assets,it shall be like this in legal application:For the contract of paying debts in kind assets in type of datio in solutum,the creditor does have the right to rescind the contact,which means that the creditor shall return new payment and the debtor return his advantage from creditor’s debt relief in the form of payment of the price,but the debtor’s obligation under former contract no longer exists.If the creditor choses to reduce price,its legal effect could be established consulted to the exercising of rescission,since the nature of price reduction being "part-rescission",which means the debtor bear the obligation of returning the advantage of debt relief in the scale of the rescission part.For the contract of paying debts in kind assets in type of new debt payment,debtor do not bear the liability for warrant of defect in principle,the exception being the creditor takes ownership of the new payment.To the benefit of the creditor,it’s more reasonable to bear the debtor the liability for warrant of defect consulting to datio in solutum type.For the contract of paying debts in kind assets in type of substitute settlement,the new obligatory relationship is already established.Therefore,as to the question of the liability for warrant of defect,the particularity remains little.But it is still worthy to point out that the substitute settlement alone can not be the object of rescission,which means that when the creditor rescind the contract of paying debts in kind assets,he will rescind the whole obligatory relationship.