Article 751
If the leased property is damaged or lost during the period when the lessee is in possession of the leased property, the lessor has the right to request the lessee to continue to pay the rent, unless otherwise provided by law or otherwise agreed by the parties.
I. Purpose of this Article
This article is a general provision on the burden of risk of damage or loss of leased property.
II. Evolution of the Provisions
The original Contract Law did not provide for the assumption of risks in leased property in financial lease contracts, and only made arrangements for the risks of leased property in traditional lease contracts in Article 231. However, there is a big difference between traditional leasing and financial leasing on the issue of risk bearing of damage and loss of the leased property, and the risk bearing rules stipulated in article 231 of the original Contract Law are directly applied, requiring the lessor of the financial lease to bear the risk of damage or loss of the leased property, which lacks realistic fairness. In 2014, the Supreme People's Court issued Article 7 of the Interpretation of Financial Leasing Contracts, taking into account the actual needs of the financial leasing business and drawing on the common practices of financial leasing legislation and relevant international conventions in various countries, stipulates that "during the period when the lessee is in possession of the leased property, the risk of damage or loss of the leased property shall be borne by the lessee, and if the lessor requests the lessee to continue to pay the rent, the people's court shall support it." Unless otherwise agreed by the parties or otherwise provided by law", providing clear normative guidance for common risk sharing issues in financial leasing contracts. Article 751 of the Civil Code incorporates the above provisions.
3. Interpretation of Provisions
This article is a provision for the lessee to continue to pay rent after the accidental loss of the financial leased property.
The difference between a financial lease contract and a general lease contract lies in its financing, which means that the lessee finances the lessor, purchases the subject matter it needs, and leases it to its own use. Therefore, if the leased property of a financial lease is damaged or lost due to reasons not attributable to the parties during the period of possession of the lessee, it is necessary to make an appropriate distribution of the unprofitable property, and the risk of accidental loss must be borne by the owner, but the lessee cannot be exempted from the obligation to pay the rent because of this. Therefore, this article stipulates that even if the leased property is damaged or lost due to accident, the lessor still has the right to request the lessee to continue to pay the rent. In addition, if the law provides otherwise or the parties agree otherwise, it shall be handled in accordance with the provisions of the law or the agreement of the parties, and the aforesaid rules shall not apply.
4. Cases
Zhang Moumou and Jiangsu Bodi Financial Leasing Co., Ltd. ship financial leasing contract dispute
Facts: On March 13, 2012, the plaintiff Bodi Company and the defendant Honggang Company signed a Sales and Purchase Contract numbered "BDZL(12)HZ002-××××", and the court ruled that Article 7 of the Interpretation of the Supreme People's Court on Issues Concerning the Application of Law in the Trial of Cases Involving Disputes over Financial Leasing Contracts stipulates that: "During the period when the lessee is in possession of the leased property, the risk of damage or loss of the leased property shall be borne by the lessee, and if the lessor requires the lessee to continue to pay the rent, the people's court shall support it." Except as otherwise agreed by the parties or otherwise provided by law. On April 17, 2013, the "Xinhongshun 7" was publicly sold by the Qingdao Maritime Court in accordance with the law, and since then, the leased property has been lost, and in accordance with the foregoing provisions, the court of first instance upheld Bodi's claim for Honggang Company to pay all 48 installments of rent. According to the No. 2 "Financing Lease Contract" and the supplementary agreement signed between Bodi Company and Honggang Company on March 29, 2012, Honggang Company shall pay pre-lease interest (the interest amount is 312,693.68 yuan per month, a total of 938,081.04 yuan) in April, May and June 2012, and the rent shall be paid normally from July 28, 2012, and the lease principal shall be 42,160,945.95 yuan. The conditions for payment at the end of the period are calculated and determined, with a total of 48 installments, one per month, and the rental interest rate is determined based on the 2 percentage point increase in the benchmark interest rate of RMB loans announced by the People's Bank of China for the same period.
5. Analysis
In accordance with Clause 25.3 of the Financing Charterparty No. 2, which states that "during the lease period, if any part of the ship is lost, damaged or destroyed, or renders it unfit for use in any way, the hire payable under this contract shall not be reduced in whole or in part, and the lessee shall not be discharged from any payment or other obligation under this contract" and Article 26 "Compensation by the Lessee to the Lessor", Honggang shall pay the rent and indemnify Bodi for its losses.