On the Legal Effect of Repayment Type Debt settlement Agreements with Assets

DOI: https://doi.org/10.62517/jel.202514207

Author(s)

Chuanqiang Lin

Affiliation(s)

Faculty of Law, China Jiliang University, Hangzhou, Zhejiang, China

Abstract

In December 2023, the Supreme People's Court issued the "Interpretation of the Supreme People's Court on Certain Issues Concerning the Application of the General Provisions on Contracts in the Civil Code of the People's Republic of China. Article 27 stipulates that an agreement reached by the debtor or a third party and the creditor after the expiration of the debt performance period is a repayment type of debt settlement agreement by means of assets. Corresponding to the "agreement reached before the maturity of the debt performance" as stipulated in Article 28, but in the form of guaranteed debt in kind agreement. The statement in Article 27 that "the people's court shall hold that the agreement takes effect when the parties' expressions of intent are consistent" determines that a repayment type debt settlement agreement is a consensual contract rather than a practical contract. Furthermore, it outlines the selection rules for creditors in scenarios where both new and old debts coexist following the agreement's entry into force, as well as in cases where the debtor defaults on obligations after the expiration of the debt fulfillment deadline. However, how to correctly understand the issue of the right to choose and whether the creditor's claim against the new debt that emerges in practice can exclude the compulsory execution by a third party still need further in-depth exploration.

Keywords

Repayment Type; Debt Settlement by Asset; Option Enforcement

References

[1]Yubo Zheng. General Theory of Obligations in Civil Law. Beijing: China University of Political Science and Law Press, 2004, 483. [2]Liming Wang. Interpretation and Commentary of the Civil Code of the People's Republic of China (General Provisions of the Contract Chapter). Beijing: China Renmin University Press, 2020, 441. [3]Liming Wang. On the Option Arising from the Repayment Type Debt Settlement Agreement with Assets - Centered on Article 27 of the "Interpretation of the General Rules of the Contract Code". Oriental Law, 2024, (02):151-162. [4]Guangxin Zhu, Hongfei Xie. Commentary on the Civil Code: Contract Chapter, General Provisions 1. Beijing: China Legal Publishing House, 2020, 383. [5]Yulin Li. On the Typified Application of Debt Settlement Agreements by Property. Legal Science (Journal of Northwest University of Political Science and Law), 2023, 41(04): 129-141. [6]Zejian Wang. Principles of Debt Law (Volume 1). Beijing: China University of Political Science and Law Press, 2001, 125. [7]Yubo Zheng. General Theory of Obligations in Civil Law. Beijing: China University of Political Science and Law Press, 2004, 486. [8]Xiaorong He. Minutes of the Judges' Meeting of the Second Circuit Court of the Supreme People's Court (Volume 3). Beijing: People's Court Press, 2022, 18-19. [9]Sakae Wagatsuma. Newly Revised General Theory of Creditor's Rights. Translated by Yi Wang. Beijing: China Legal Publishing House, 2008, 319. [10]Jianhui Shi. Research on Debt Settlement Contract by Asset. Journal of Nanjing University (Philosophy, Humanities and Social Sciences), 2014, 51(06): 36-43+154. [11]Junyong Bai. The Predicament and Solution for Eliminating Compulsory Enforcement of Real Estate through Debt Settlement with Assets: An Analysis Sample of 152 Execution Objection Lawsuits on the China Judgments Online. People's Justice, 2022, (19): 68-72+90.