Article 747
If the leased property does not conform to the agreement or the purpose of use, the lessor shall not be liable. However, there is an exception where the lessee relies on the lessor's skills to determine the leased property or the lessor intervenes in the selection of the leased property.
I. Purpose of this Article
This article is about the lessor's exemption from liability and exceptions to the warranty for defects in the leased property.
II. Evolution of the Provisions
This article is amended on the basis of article 244 of the original Contract Law, which stipulates that: "If the leased object does not conform to the agreement or the purpose of use, the lessor shall not be liable, unless the lessee relies on the lessor's skill to determine the leased object or the lessor intervenes in the selection of the leased object." In this article, "except where the lessee relies on the lessor's skill to determine the leased object or the lessor intervenes in the selection of the leased thing" is amended to "provided, except where the lessee relies on the lessor's skill to determine the leased object or the lessor intervenes in the selection of the leased object". Article 538 of the Civil Code Contract Series (First Reading Draft) stipulates that: "If the leased thing does not conform to the agreement or the purpose of use, the lessor shall not be liable, except where the lessee relies on the lessor's skills to determine the leased object or the lessor intervenes in the selection of the leased object." Article 538 of the Civil Code Contract (Second Reading Draft) is the same. Article 747 of the Civil Code (Draft) amends "except where the lessee relies on the lessor's skills to determine the leased property or the lessor intervenes in the selection of the leased object" to "however, the lessee relies on the lessor's skills to determine the leased object or the lessor intervenes in the selection of the leased object", changing the punctuation marks after the proviso to conform to the expression habits of modern Chinese.
3. Interpretation of Provisions
This article stipulates the liability for warranty for defects in the quality of the leased property.
If the financial lease contract is established, if the leased object does not conform to the agreement or the purpose of use within the performance period, the responsible party shall bear the liability for the warranty for the quality defects of the leased object. The rules for the allocation of warranty liability for quality defects in the leased property are: (1) The general rule is that the lessor does not bear the liability, but the lessee bears the liability, on the grounds that the choice of the leased property is determined by the lessee, and it is legitimate for the lessee to bear the liability for the guarantee of the quality defects of the leased object. (2) Special rules, if the lessee's selection of the leased object depends on the lessor's skill, or if the lessor intervenes in the selection of the leased object, the lessor's will is added to the selection of the leased object, so the liability for the warranty for defects in the quality of the leased object shall be borne by the lessor.
4. Cases
Yang Moumou and CDB Financial Leasing Co., Ltd., a financial leasing contract dispute
Facts: On September 28, 2015, the plaintiff, CDB Financial Leasing Co., Ltd., went through the procedures for industrial and commercial change, and the name of the enterprise was changed to CDB Financial Leasing Co., Ltd. The third person, Hong Mousen, is a staff member of the Zunyi Branch of the third-party Tongcheng Company. On October 20, 2016, Hong Mousen wrote a "sales application form", which stated the basic identity information, nature of purchase, and years of experience of the customer (that is, the defendant) Yang, the model was ST365, and the sales method was financial leasing, with a deposit of 50,000 yuan and a total equipment price of 1,500,000 yuan, of which the machine price was 1,455,000 yuan, and the freight was 45,000 yuan, and the financial lease was 85 into 3 years, and the payment was 224394 yuan when the machine was picked up (the machine payment =First futures payment + financial lease fee + freight collection). Later, the machine malfunctioned, and the defendant Yang Moumou refused to pay rent to the plaintiff CDB Financial Leasing Company on this ground, and the plaintiff immediately filed a lawsuit. The court ruled that since this case was a financial leasing legal relationship, according to Article 244 of the Contract Law of the People's Republic of China, "if the leased object does not conform to the agreement or the purpose of use, the lessor shall not be liable, unless the lessee relies on the lessor's skills to determine the leased object or the lessor intervenes in the selection of the leased object" Therefore, the failure of the excavator involved in the case cannot be used as a statutory reason for non-payment of rent, and Yang Moumou may claim rights against the relevant obligor in a separate case.
5. Analysis
According to the "Sales Application Form" submitted by Yang Mousen written by Hong Mousen and signed and stamped by Yang Moumou, which stated that the sales method of the excavator involved in the case was financial leasing, and the amount and expenses of the financial lease and the average monthly repayment of the financial lease were clearly agreed in the application form, so the behavior of the plaintiff and the defendant Yang Moumou respectively signing and sealing the financial lease contract involved in the case produced the legal consequences of the conclusion of the contract. With regard to the failure of the leased property, the defendant could not refuse to pay the rent on the basis of the failure of the leased property as a defense because it could not prove that it had determined the leased property based on the plaintiff's skill or had chosen the leased property with the plaintiff's intervention. The defendant shall pay the rent in accordance with Article 752 of the Civil Code, which states that "the lessee shall pay the rent as agreed." If the lessee still fails to pay the rent within a reasonable period of time after being reminded, the lessor may request to pay all the rent, or it can terminate the contract and take back the leased property".