Research On The Factor’s Recourse

The factoring contract is the only new typical contract in the Civil Code.Chapter 16 contains nine articles on the concept,scope and classification of factoring contracts and the order of indemnity in the event of a conflict of rights,providing specific legal guidance for the development of the factoring industry.However,the content of the right of recourse is only reflected in two articles 766 and 767,which only provide for the exercise of the right of recourse in factoring contracts.The right of recourse is the core right of the factor,but the nature of the right of recourse,the order of exercise,the remedy in case of breach of contract and infringement are all controversial in the theoretical and practical circles,and a perfect system has not yet been formed.Apart from the introduction,the author mainly discusses the four parts: the origin of the problem,the nature,exercise and remedy of the factor’s right of recourse.The origin of the problem part mainly analyzes the legislative provisions on the factor’s right of recourse in the Civil Code,leading to the three problems of unclear nature of the right of recourse,vague rules of exercise and gaps in the remedy in the legislation.The nature section analyses the four mainstream views on factoring contracts with recourse,and concludes that the adoption of the theory of assignment of claims as security can fit in with the transaction model of factoring contracts with recourse,as well as reflect its legislative techniques and legal construction.Under this theory,the nature of recourse should be recognised as a security for a claim.The exercise section elaborates on the conditions,order and manner of exercise of the factor’s right of recourse.In a dark factoring contract,the exercise of the factor’s right of recourse does not require notice of assignment of the claim,and whether or not notice of assignment of the claim is given does not affect the exercise of the factor’s right of recourse;in an express factoring contract,there is no necessary order of priority between the exercise of the right of recourse and the right of collection;the factor’s right of recourse can be realised in three ways,namely: repayment of principal and interest on the financing,repurchase of the receivables and other ways agreed between the parties.The section on the remedies for the factor’s right of recourse focuses on the remedies for the factor’s right of recourse in cases of breach of contract,tort and unjust enrichment,and provides reasonable suggestions for the improvement of the factor’s recourse protection system.