1、Category of contract,Kinds of Contract The Value for Differentiation Dispositive Juristic Act and Its Cause Contract Causa Type Contract Non-type contract Mixed-Type contract Financial Lease,Kinds of Contract,Nominate contract (type contract), non-nominate contract (non-type contract) Consensual con
2、tract, real contract Two-side contract, one side contract Onerous contract, gratuitous contract Informal contract, formal contract Main contract, preliminary contract,Nominated contract (type contract),Transaction of property Onerous contract Sale, exchange, lease, loan for consumption, Contracts fo
3、r the Supply and Use of Electricity, Water, Gas and Heat Non-onerous Gift, loan for consumption, loan for use,Nominated contract (type contract),Service Contract Typical service contract Employment Contract for work Mandate Mixed type serviceEmployment Contract for work Construction Project Contract
4、 Carriage Publishing contract Mandate Warehousing, brokerage, commission agent, forwarding agent, commercial agent, manager contract, deposit contract,Nominated contract (type contract),Other contract A joint undertaking Bid society partnership Technology Contract Settlement Suretyship,non-nominated
5、 contract (non-type contract),Contract sui generis Binding Contracts Mixed contract (one contract) Absorption theory Combination theory Analogy theory,Consensual contract v. real contract,Consensual contract (executory contract) A contract which is formed by the exchange of reciprocal declarations o
6、f intention.sale, gift (PRC CL 186), loan for consumption (PRC CL210), warehousing (PRC CL382), carriage (PRC CL) Real contract (executed contract) A contract which is formed by the delivery of the subject matter of the contract in addition to the exchange of reciprocal declaration of intention. Loa
7、n for consumption within natural person (PRC CL210) ,loan for consumption (Japan, ROC), deposit (PRC Cl367, Japan, ROC Civil C),Informal contract v. formal contract,Formation of contract Formation required by law Informal contract Japan: all type contracts PRC: sale, gift ROC: sale, gift Formal Cont
8、ract A contract which a specific formality shall be excised to form such a contract Formation agreed by the parties,Financial Lease,Definition of Financial Leasing Contract,A financial leasing contract is a contract whereby the lessor, upon purchase of the lessee-selected lease item from a lessee-se
9、lected seller, provides the lease item to the lessee for its use, and the lessee pays the rent. (PRC CL Article 237),Unidroit Conventions on International Financial Leasing Article I para. 2,2.The financial leasing transaction referred to in the previous paragraph is a transaction which includes the
10、 following characteristics: (a) the lessee specifies the equipment and selects the supplier without relying primarily on the skill and judgment of the lessor; (b) the equipment is acquired by the lessor in connection with a leasing agreement which, to the knowledge of the supplier, either has been m
11、ade or is to be made between the lessor and the lessee; and (c) the rentals payable under the leasing agreement are calculated so as to take into account in particular the amortization of the whole or a substantial part of the cost of the equipment. 3. This Convention applies whether or not the less
12、ee has or subsequently acquires the option to buy the equipment or to hold it on lease for a further period, and whether or not for a nominal price or rental. 4. This Convention applies to financial leasing transactions in relation to all equipment save that which is to be used primarily for the les
13、sees personal, family or household purposes.,Lessor,lessee,Finance lease,loan,Lender,Borrower,Seller,Purchaser,The possessor of the leased item,Deliver the lease goods,Sale of Goods,Pay rent,Owner of theleased item,Loan for consumption,Lender,Borrower,Seller,Purchaser,Deliver the lease goods,Sale of
14、 Goods,Amortize loans,Owner and Possessor of the item,Mortgage in a chattel,Mortgagee,Mortgagor,Seller,Purchaser,Deliver the goods,Sale of Goods,Payment of the price by installment,Possessor of the item,Transfer of the title : until condition precedent fulfilled,Transferee,Transferor,Owner of the it
15、em,Attributes of Finance Lease,Type contract Lease Loan for consumption Sale Non-type Contract,Attributes of Finance Lease,The alleged financial lease enterprise is an enterprise that leases goods to a person who needs the goods after providing the capital to buy the goods leased and obtaining the g
16、ood title of goods, other than an enterprise from which it lends money to a person who needs capital funds. Such a transaction pattern, without violating mandatory law, public policy, and good moral, is helpful to the industrial and commercial activities of our country. The purpose of such a financi
17、al lease is to provide capital fund for the lessee, and the loan for consumption could reach the goal to raise capital fund as well: however, both contract are totally different with each other. Considering the features of a financial lease, it should be interpreted as a “non-type contract” which is
18、 similar to a lease contract because a financial lease differs with a loan for consumption regarding the distribution of interest and hazards of the leased goods. Taiwan Supreme Court Civil Decision Case No. 482 (2004).,Case Study,The finance lease means an economic activity from which the leasing c
19、ompany purchases an object for lease under the request of the lessee and rents it to the lessee for the purpose of use. On the other hand, an enterprise who needs an equipment or a machine selects an equipment or a machine from a supplier or a distributor. However, the enterprise is reluctant or una
20、ble to raise funds to purchase the equipment or machine. Then the enterprise turns to request the leasing company to buy the equipment and machine from the supplier or distributor and lease the item from the leasing company. The lessee then pays rental at stated period to assure of the payment of pr
21、ice, interest, other expenses, and the profit afterward.,Because the lessor is on the position of a fund provider, he dont own the inventory of equipment or machine and dont have knowledge about the equipment, in the whole lease activity, the lessor is only obligated to provide a fund to purchase th
22、e equipment and machine designated to the use of the lessor. Hence, all the duties pertaining to the owner, such as custody, repair, tax duty, burden of hazard, should be on the side of the lessee.,The lessor,The Lessee,Lease,loan,Lender,Borrower,Seller of resale,Resale of the machine,Rent payment,P
23、ayment of the price,The Original Sale of Machine,Da Pi Fa Co. (the purchaser and possessor ofthe machine),Zhong Zu Leasing Company (The appellee),President Co. (Creditor of Da Pi Fa Co.) (The appellant),Hong Ying Co. (the seller of the machine),Buyer of resale,compulsory execution of the machine,ROC
24、 Civil Code Article 761,The transfer of rights in rem of personal property will not effect until the personal property has been delivered. However, if the transferee has been in possession of the personal property, the transfer effects when the parties agree to such transfer. In the transfer of a ri
25、ght in rem of personal property, where the transferor is still in possession of it, a contract causing the transferee to acquire its indirect possession may be made between the parties in the place of its delivery.,ROC Civil Code Article 87,A fictitious expression of intent made by the expresser in
26、collusion with other party is void, but the voidance can not be a valid defense against any bona fide third party. If the fictitious expression of intent was intended to conceal another juridical act, the provisions of the act with respect to such another juridical act shall apply.,ROC Civil Code Ar
27、ticle 761,In the transfer of a right in rem of personal property, where a third party is in possession of it, the transferor may transfer the claim against such third party for the return of it to the transferee in place of its delivery.,The lessees rights,Lessees Assumption of Buyers Rights Under t
28、he sales contract concluded by the lessor according to the lessees selection of the seller and the lease item, the seller shall deliver the subject matter to the lessee in accordance with the contract, and the lessee enjoys the rights of the buyer in respect of taking delivery of the subject matter.
29、 (PRC Contract Code Article 239),The lessees rights,Lessees Assumption of Buyers Remedies in Case of Sellers Non-performance The lessor, the seller and the lessee may agree that any claim arising from the sellers non-performance of its obligations under the sales contract will be made by the lessee.
30、 Where the lessee makes such a claim, the lessor shall provide assistance. (PRC Contract Code Article 240),Amendment of Sales Contract,Certain Amendment of Sales Contract Subject to Consent by Lessee Absent consent by the lessee, the lessor may not amend any lessee-related term in the sales contract
31、 concluded by it according to the lessees selection of the seller and the lease item. (PRC Contract Code Article 241),Title to the lease item,Exclusion of Lease Item from Bankruptcy Assets of Lessee Title to the lease item vests in the lessor. In case the lessee enters into bankruptcy, the lease ite
32、m is not part of its bankruptcy assets. (PRC Contract Code Article 242),Rent,Determination of Rental Components Unless otherwise agreed by the parties, the rent under a financial leasing contract shall be determined based on the major portion of or full costs of purchasing the lease item and the les
33、sors reasonable profit. (PRC Contract Code Article 243),Warranty for fitness,Lessor Not Liable for Non-fitness of Lease Item; Exceptions Where the lease item does not comply with the contract or is not fit for the intended purpose, the lessor is not liable, except where the lessee relied on the skil
34、ls of the lessor in selecting the lease item or the lessor interfered in the selection thereof. (PRC Contract Code Article 244),Warranty by Lessor,The lessor shall give warranty in respect of the lessees possession and use of the lease item. (PRC Contract Code Article 245),Liability for Injury,Lesso
35、r Not Liable for Damage or Injury If while in the possession of the lessee, the lease item caused personal injury or property damage to any third person, the lessor is not liable. (PRC Contract Code Article 246),Maintenance Obligations,Lessees Obligation of Due Care; Maintenance Obligations The less
36、ee shall keep (or keep it in his custody) and use the lease item with due care. While in possession of the lease item, the lessee shall perform the obligations of maintenance and repair thereof. (PRC Contract Code Article 247),Lessor s Remedies,Lessor s Remedies in Case of Non-payment by Lessee The
37、lessee shall pay the rent in accordance with the contract. Where the lessee fails to pay the rent within a reasonable period after receiving demand for payment from the lessor, the lessor may require payment of the full rent; or it may terminate the contract and repossess the lease item. (PRC Contra
38、ct Code Article 248),Refund,Partial Refund in Case of Termination by Lessor Where the parties agreed that title to the lease item will vest in the lessee at the end of the lease term, and after paying a major portion of the rent, the lessee is unable to pay the remaining balance, resulting in the le
39、ssors termination of the contract and repossession of the lease item, if the value of the repossessed lease item exceeds the rent owed by the lessee and other expenses, the lessee may require partial refund. (PRC Contract Code Article 249),Ownership of Lease Item,Ownership of Lease Item at End of Le
40、ase Term The lessor and the lessee may agree on the ownership of the lease item at the end of the lease term. Where ownership of the lease item was not prescribed or clearly prescribed, and cannot be determined in accordance with Article 61 hereof, title to the lease item shall vest in the lessor. (PRC Contract Code Article 250),
