Research On The Applicable Law For Factoring Contract Dispute

Factoring contract is a new typical contract added to the Civil Code of the People’s Republic of China,consisting of nine articles,which regulate the basic concepts and dispute resolution around factoring contracts,making factoring contracts join the ranks of famous contracts from nameless contracts,fully reflecting the importance the state attaches to factoring contracts and the increase of its market recognition.The new provisions of the Civil Code on factoring contracts respond to the problems in the practice of factoring contracts in terms of the determination of the nature of the contract,false receivables,the subject of notice of assignment of claims,the validity of changes to the underlying contract,and the order of multiple factoring indemnity,and provide a certain degree of normative support for the further promotion and development of factoring business.However,the scope of regulation covered by the nine articles is obviously insufficient to fully protect the legitimate rights and interests of the parties.Because of the characteristics of factoring business,the understanding of individual concepts in the existing legal provisions needs to be further explained and clarified in the light of the legislative purpose,the current state of the country’s macroeconomic development and the factoring transaction habits.In recent years,with the rapid development of factoring industry in China,disputes over factoring contracts have also occurred in large numbers.The diversification of factoring contract types and interest subjects has led to the factoring contract disputes involving more legal subjects and multiple legal relationships,etc.The issues of how to determine the nature of the contract,the effect of false,defective or altered underlying contracts on the validity of factoring contracts,and how to bear the responsibilities between different subjects have become the difficulties in factoring contract cases.Therefore,this paper intends to conduct an in-depth and systematic study on the legal application of factoring contract disputes based on the theoretical research of domestic and foreign scholars,the statistical analysis of domestic judicial practice,and the practical experience of trials,from the perspective of the background of the formation of factoring contract system,the clarification of the legal nature,the transformation of international treaties,and the guidance of typical cases,with a view to promoting the establishment and improvement of the rules of the application of factoring contract law and the normal development of factoring contracts.The purpose of this paper is to provide reference for the establishment and improvement of the legal rules applicable to factoring contracts and the normal development of factoring business.In addition to the preface and conclusion,this paper is divided into four parts to study the legal application of factoring contracts.First,a comprehensive search and analysis of the published judgment documents of factoring contract disputes from 2020 to 2022.Secondly,by sorting out the judicial opinions,it can be seen that although the Civil Code has set up a special chapter to regulate factoring contracts.However,in terms of the nature of factoring contracts,the criteria for determining the impact of false accounts receivable on factoring contracts,the conditions for determining eligible future accounts receivable and the jurisdiction of factoring disputes,the scale of adjudication is still not uniform.Thirdly,in view of the aforementioned differences,the theoretical support of the corresponding issues is sought.Fourthly,combining with the trial practice,we put forward a few opinions on improving the application of factoring contract law.