Article 761
A factoring contract is a contract in which an accounts receivable creditor transfers an existing or future accounts receivable to a factor, and the factor provides services such as financing, accounts receivable management or collection, and payment guarantee for accounts receivable debtors.
I. Purpose of this Article
This article deals with the concept of factoring contracts.
II. Evolution of the Provisions
This is a new provision.
3. Interpretation of Provisions
This article regulates the concept of factoring contracts and accounts receivable.
A factoring contract is a contract in which the accounts receivable creditor transfers the existing and future accounts receivable to the factor, and the factor provides services such as financing, accounts receivable management or collection, and payment guarantee for the accounts receivable debtor. Its legal characteristics are: (1) the factoring contract is premised on the transfer of accounts receivable arising from the trade in goods contract and the service trade contract. (2) Based on the transfer of accounts receivable, the transferee provides comprehensive financial services to the transferor; (3) The content of providing financial services is to provide services such as financing, accounts receivable management or collection, and payment guarantee of accounts receivable debtors. Based on whether the factor has recourse to the accounts receivable, the factoring contract is divided into recourse factoring and non-recourse factoring. In a factoring contract, the party that assigns the accounts receivable claim is the accounts receivable creditor, and the party that accepts the accounts receivable claim and provides financial services is the factor.
Factoring originated in England in the 18th century, and developed in the United States and Western European countries in the 50s of the 20th century, becoming a new type of trade finance, which has been widely used in the past 20 years. The development of factoring business in mainland China is relatively late and slow. The provisions of the Civil Code on factoring contracts will promote the development of factoring business in mainland China.
Accounts receivable refers to the amount that an enterprise should collect from the purchasing unit due to the sale of goods, products, provision of labor services and other businesses in the normal course of business, including taxes that should be borne by the purchasing unit or the receiving labor unit, and various transportation and miscellaneous expenses paid on behalf of the purchaser. Accounts receivable is a creditor's right formed with the occurrence of sales behavior of an enterprise. Accounts receivable include claims that have already occurred and will arise in the future. The former is a claim that has already occurred and is clearly established, while the latter is a claim that has not actually occurred but will definitely occur in the future.
4. Cases
Shenzhen Nuclear Power Engineering Construction Co., Ltd. and China Minsheng Bank Co., Ltd. Wuhan Branch Financial Loan Contract Dispute
Facts: On October 31, 2013, the Wuhan Branch of Minsheng Bank and Huaxinke Company signed the Trade Financing Master Agreement numbered ZH××××, and on the same day, the Wuhan Branch of Minsheng Bank and Huaxinke Company also signed a Factoring Service Contract and a Factoring Service Contract - Subsidiary Contract. In this case, the Wuhan Branch of Minsheng Bank and Huaxinke Company signed a Factoring Service Contract, and the basis of the factoring business was the Procurement Contract between Huaxinke and the Nuclear Power Company In the performance of the accounts receivable formed, the Wuhan Branch of Minsheng Bank, as the factor, obtains the relevant rights and interests of the above-mentioned accounts receivable through the transfer of creditor's rights, and the nuclear power company, as the debtor, shall perform the obligation to repay the creditor to ensure the repayment of the financing funds under the factoring contract signed between Huaxinke Company and Wuhan Branch of Minsheng Bank. Based on the performance of the factoring contract involved in the case, the nuclear power companies formed a corresponding relationship of rights and obligations. Although the nuclear power company was not a party to the factoring contract in question from the form of the contract, the subject matter of the factoring contract was the accounts receivable corresponding to the purchase contract signed between Huaxinke and the nuclear power company, and it was not improper for the Wuhan Branch of Minsheng Bank to recover the accounts receivable from the debtor of the user, i.e., the nuclear power company, on behalf of the borrower based on the factoring contract signed between the company and Huaxinke. As for the ownership of the designated account of accounts receivable, it is not a constitutive element to confirm the validity of the assignment of creditor's rights, and should not be used as a direct basis for the assignment of creditor's rights involved in the case. Therefore, the nuclear power company's argument that the assignment of claims should be prosecuted separately lacked factual basis and was not supported.
5. Analysis
The Trade Financing Master Agreement, the Comprehensive Credit Contract, and the Factoring Business Contract signed by the Wuhan Branch of Minsheng Bank and Huaxinke Company, as well as the Personal Maximum Guarantee Contract signed by the Wuhan Branch of Minsheng Bank and Li and Zhang, are all expressions of the true intention of the parties, and do not violate the mandatory provisions on the validity of laws and regulations, and shall be legal and valid. The factoring contract signed between the Wuhan Branch of Minsheng Bank and Huaxinke Company is premised on the transfer of accounts receivable enjoyed by Huaxinke Company to the Wuhan Branch of Minsheng Bank to the nuclear power company. According to the letter of introduction, after the nuclear power company stamps and confirms on the receipt, based on the corresponding rights and obligations of the accounts receivable business, the Wuhan Branch of Minsheng Bank, as the factor, obtains the relevant rights and interests of the accounts receivable through the transfer of creditor's rights, and the nuclear power company, as the debtor, shall fulfill the obligation to repay the creditor.