In economic activities such as lending, buying and selling, in order to ensure the realization of creditor's rights, creditors usually require the debtor to provide security to a third party with the credit of a third party or with specific property. However, due to the various forms of security and the complexity of the legal relationships involved, the disputes arising therefrom are also increasing, and the following 10 common legal practice issues involving guarantees are analyzed for your reference.
1. Money can be used for pledge after meeting certain formal requirements.
To establish a pledge, the parties shall enter into a pledge contract in writing, and the pledge shall be established when the pledgee delivers the pledged property. According to the relevant laws and regulations, the debtor or a third party specifies its money in the form of a special account, sealed money, security deposit, etc., and then transfers it to the creditor for possession as security for the creditor's rights, and when the debtor fails to perform the debt, the creditor may be repaid with the money in priority. It can be seen that money, as a special movable property, can be used for pledge after it has certain formal requirements.
2. When the land use right is mortgaged, the buildings that have been completed on it shall be regarded as mortgaged together.
The principle of unity of rights of "land goes with the house, and the house goes with the land" is a consistent principle of real estate ownership in mainland China. In accordance with relevant laws and regulations, the transfer or mortgage of land use rights shall result in the transfer and mortgage of the ownership of above-ground buildings and other attachments; When the ownership of above-ground buildings and other attachments is transferred or mortgaged, the land use rights within the scope of its use shall be transferred and mortgaged. However, above-ground buildings and other attachments are transferred as movable property. Therefore, even if the mortgage registration is only for the house or land use right, it should be deemed that the parties have agreed that the land use right and the ownership of the ground building will be mortgaged together.
3. If the debtor waives the defense, the guarantor still has the right to do so.
The guarantee contract is a subordinate contract of the main contract, and the guarantor should enjoy the rights of the principal debtor against the creditor. Moreover, if the debtor waives the defense, this is in itself an abnormal behavior, which is a disregard for its own rights, and it is more likely to maliciously collude with the creditor to damage the rights of the guarantor. In order to protect the legitimate rights and interests of the guarantor, the law gives the guarantor the right to defend against the creditor, even if the debtor waives the defense against the creditor, the guarantor still has the right to assert the defense against the creditor.
4. The consent of the mortgagee is no longer required for the mortgagor to transfer the mortgaged property.
According to the relevant laws and regulations, the mortgagor can transfer the mortgaged property during the mortgage period. Where the parties agree otherwise, follow their agreement. If the mortgaged property is transferred, the mortgage right shall not be affected. Where the mortgagor transfers the mortgaged property, it shall promptly notify the mortgagee.
If the mortgagee can prove that the transfer of the mortgaged property may damage the mortgage right, it may request the mortgagor to pay off the debts or deposit the proceeds of the transfer to the mortgagee in advance. The part of the transfer price in excess of the amount of the claim shall be owned by the mortgagor, and the debtor shall pay off the shortfall.
5. The mortgagor does not directly bear the debts of the principal debtor.
When the mortgagor is not the principal debtor, the mortgagee can only realize the claim against the mortgagor within the scope of the mortgaged property. The mortgagee may request the auction or sale of the mortgaged property to be repaid in priority, but shall not request the mortgagor to directly bear the debts of the principal debtor.
6. The guarantee liability shall not be exempted without the consent of the creditor.
The guarantee contract is the result of the agreement of the parties, and the change of the guarantor must be agreed by the creditor. If there is no agreement between the creditor and the guarantor to extinguish the guarantee liability, even if the debtor or a third party provides corresponding security for the creditor's rights, the creditor accepts it, and the guarantor cannot be exempted from the guarantee liability.
7. When the main contract is invalid, the fault of the guarantor shall be determined.
In the event that the invalidity of the main contract leads to the invalidity of the guarantee contract, the guarantor is not a party to the main contract, and the invalidity of the main contract shall not require the guarantor who is not a party to the contract to bear the invalid result. Therefore, the fault of the guarantor should not be the fault of the guarantor in the invalidity of the main contract.
The fault of the guarantor shall include: the guarantor clearly knows that the main contract is invalid but still provides security, and the guarantor clearly knows that the main contract is invalid but still promotes the formation of the main contract or acts as an intermediary for the signing of the main contract.
8. An important symbol to distinguish the guarantee liability is the right to defend in the first instance.
An important symbol of the difference between a joint and several liability guarantee and a general guarantee is that the guarantor of a general guarantee has the right to defend in the first instance, that is, the creditor must first claim its rights against the principal debtor, and only then can the guarantor be required to bear the guarantee liability if it cannot be repaid after enforcement; The guarantor of the joint and several liability guarantee does not have the right to defend in the first instance.
9. The developer bears joint and several liabilities for liquidation.
In order to obtain bank funds, the developer colluded with a natural person to sign a false contract for the sale and purchase of pre-sold commercial housing, and signed a mortgage contract for commercial housing with the bank in the name of the natural person to obtain a bank loan, which is in the name of the sale and purchase of commercial housing, and the developer's financing is actually carried out, which damages the interests of the bank and endangers the security of the bank loan, and the contract for the sale and purchase of commercial housing should be deemed invalid.
In this regard, the developer and the natural person are obviously at fault, and after the contract for the sale and purchase of commercial housing is confirmed to be invalid in accordance with the law, the developer and the natural person shall be jointly and severally liable for the repayment of the bank's loan.
10. If you provide a guarantee in accordance with the government's instructions, you will also be liable for the guarantee.
As a legal person with full capacity for civil conduct, the guarantor shall independently bear civil liability for the civil juristic acts it engages in in accordance with the law, and the question of whether the guarantee made by the guarantor is affected by a third party other than the contract does not involve the rights and obligations between the parties to the contract, nor does it affect the validity of the guarantee contract.
Since one of the parties to the contract has no obligation to understand other factors other than the signing act of the counterparty of the contract, it is unfair to the guarantor to admit the fact that it has stamped the guarantee contract on the one hand, and deny that the signing act is its true expression of intent on the other hand. If there is no evidence to prove that the guarantor used fraud, coercion or other means when signing the guarantee contract with the guarantor, the guarantee contract should not be invalidated simply because the guarantor's guarantee was ordered by the local government.
For more legal issues, we recommend that you pay attention to the Gyeonggi Financial Assets & Law Headlines
Note: Part of the content is quoted from the Civil and Commercial Law Think Tank