Study On Legal Issues Of Assignment Of Factoring Contract Receivables

Before the introduction of the Civil Code,the regulation of commercial factoring was based on the relevant normative documents issued by the Ministry of Commerce,the People’s Bank of China and the Banking and Insurance Regulatory Commission,and there were problems such as general provisions,low level of effectiveness and limited adjustment of objects,which led to differences in judicial decisions.This paper focuses on the core theme of legal issues of assignment of accounts receivable in factoring contracts,and considers the nature of assignment of accounts receivable in factoring contracts,multiple assignment of accounts receivable,fictitious accounts receivable and future accounts receivable as its basic legal issues,and conducts a research on theoretical doctrines,judicial decisions and legal provisions through literature research method,case analysis method and comparative research method,The legal issues include the nature of assignment of receivables,multiple assignment of receivables,fictitious receivables and future receivables.Specifically,the last article of the Civil Code in the chapter dedicated to factoring contracts provides for a catch-all clause:the relevant provisions on the assignment of claims apply.It is thus clear that the application of the regime for accounts receivable as a type of claim partially overlaps with the general rules on the assignment of claims.The differences in the determination of the nature will lead to different legal consequences,which is directly reflected in the different understanding of the courts in terms of the cause of action,jurisdiction and litigation status of the parties,and is also the basis for the study of the basic legal issues of assignment of accounts receivable.The first part of the article discusses the nature of assignment of accounts receivable in factoring contracts,and argues that the nature of assignment of accounts receivable should be an assignment of claims.The second part of the article examines the legal issues of multiple assignments of accounts receivable in factoring contracts,exploring the antagonistic elements of the subordination of the realisation of rights according to the newly established rule of the Civil Code that registration takes precedence and notification takes second place among factors,as well as the application of the rule of division of claims when the antagonistic elements are unclear to resolve the issue of the subordination of the realisation of rights in multiple assignments of accounts receivable.Another fundamental legal issue in the assignment of receivables in factoring contracts is fictitious receivables,and Part Ⅲ examines the issue of fictitious receivables in factoring contracts.Unlike general false representations that lead to the invalidity of a contract,fictitious accounts receivable do not necessarily lead to the invalidity of a factoring contract,which constitutes a relatively separate legal relationship from the accounts receivable that form the underlying transaction,and should be evaluated on its own merits as to whether it has a cause of invalidity.In particular,the subjective state of the factor directly determines the choice of the right remedy path.Improving and constructing a registration platform with public credibility will also help to clean up the overall environment for the assignment of accounts receivable.The proportion of accounts receivable classified as factoring in the future is on the rise,and the Civil Code recognises for the first time the legitimacy of future claims classified as factoring.On the basis of the principle-only provisions,Part Ⅳ of the article explores the outer limits of their application.Future receivables are only eligible for assignment of factored receivables if they are not inherently prohibited from being assigned and if they are certain and foreseeable.