Effectiveness Of A Financial Lease Contract In The Case Of A Fictitious Lease

Article 737 of the Civil Code of the People’s Republic of China provides that a finance lease entered into by the parties by means of a fictitious lease is void.Although Article 737 of the Civil Code defines the specific manifestations of fictitious leases,the provision requires further interpretation.For example,the scope of the leases in question,the lack of specificity or unclear ownership of the leased property,the fictitious amount of financing leading to a clear discrepancy between the valuation of the leased property and the effectiveness of the contract,and other criteria must be taken into account.Therefore,by examining the interpretation of Article 737 of the Civil Code,this article refines the criteria for determining the facts of the fictitious lease,which will help guide judicial prudence in future judicial practice to make a general negative assessment of the validity of finance leases for fictitious leases by establishing the standard of assessment of whether the lessor has fulfilled its duty to test reasonableness and creating a perfect system for allocating the burden of proof.This will not only be conducive to the development of finance leasing business of finance companies,but also promote the prosperous development of the whole finance leasing market.It can also play an important role in promoting industrial innovation and upgrading,Broadening funding channels for existing and promoting the growth of start-up industries,and promoting economic.This thesis is divided into five parts.The introduction part closely follows the legislative developments and social hotspots,and analyzes and summarizes the current legislative and judicial status of Article 737 of the Civil Code in the light of the Civil Code,the Judicial Interpretation of Financial Leasing and the Measures for the Supervision and Administration of Financial Leasing Companies,and points out that there are currently problems in theory and practice regarding the definition of eligible leases,the recognition of "fictitious leases",the specific circumstances of "fictitious leases" and the difficulties in determining the validity of contracts under fictitious leases.The problem of the definition of "fictitious leases",the specific situation of "fictitious leases" and the problem of determining the validity of contracts in the case of fictitious leases exist in theory and practice.The concept of fiction is intended to be limited to cases where the object does not exist,but in the context of "fictitious receivables" in Article 763 of the Civil Code,it is concluded that fiction should be interpreted in an expanded manner.In defining the nature of fictitious acts,based on the integrity of the system of contractual nullity in the Civil Code,this article proceeds on the premise that the "fictitious act" in Article 737 is a specific application of the "false act" in Article 146.The second part discusses the determination of the act of "fictitious leasehold" in Article 737 of the Civil Code,and further determines and analyses the fictitious leasehold from four aspects: the fictitious object,the fictitious perpetrator,the fictitious subjective elements and the fictitious act.The third part details the specific manifestations of fictitious leases: fictitious leases that do not exist,leases that do not transfer ownership,leases that are not specific,and leases that are purchased at an inflated price,etc.Part IV distinguishes between the effects of a financial lease contract under different circumstances of fictitious leases between two parties and unilateral fictitious leases in view of the various acts that may constitute "fictitious leases" in real situations.Therefore,the cases of fictitious leases are broadly divided into two types of situations: "fictitious leases between the lessee and the lessor" and "fictitious leases between the lessee and the lessor unilaterally".In particular,in the case where the lessee unilaterally falsifies the leased property,the establishment of the legal relationship of the financial lease should not be directly denied,but should be combined with whether the lessor has fulfilled its duty of reasonable examination to make a comprehensive judgment,and then analyse the problems faced by the standard of the lessor’s duty of reasonable examination at the present stage in China,so as to propose in the fifth part of this article four kinds of financial lease risk prevention measures for the lessor in the case of falsified leased property.In the fifth part of this article,we propose four types of risk prevention measures for financial leasing contracts under fictitious leases.