How to avoid the other side of the contract defaulting on payment?

For lawyers in Wang Qiang, it is a comprehensive and complicated job to ensure the timely withdrawal of payment, which involves all aspects of the contract. It can be divided into three periods: contract conclusion period, contract signing and performance period, and default recovery period. I. Period of Contract Signing The period of contract signing refers to the period before contract signing. The main task of this period is to investigate the subject of the other party, especially the credit status of the other party. That is, to examine the operation, capital structure, commercial credit and solvency of the other party to the contract. It is an important and necessary job to investigate the credit status of the other party to the contract. A contract signed on the basis of the real investigation results will definitely increase the probability of timely recovery of the payment. In particular, it is best to conduct a credit investigation on the old counterparties who request to change the transaction or the trading habits of both parties (such as reducing the transaction amount, extending or shortening the payment term, changing the payment method, etc.). ) to ensure that the credit status of the counterparty has not changed fundamentally and increase the possibility of receivables recovery. There are two ways of credit investigation: direct investigation and indirect investigation. 1, direct investigation method This method refers to the direct understanding of customer information by visiting business premises, interviewing key management personnel, and consulting financial data in recent years. After rational analysis of financial data, make an overall preliminary assessment of the customer's financial situation and assets; Visit the business premises to understand the team spirit and work efficiency of customers; Interview management personnel, flexibly understand and verify the authenticity and accuracy of all kinds of information. 2. Indirect survey method This method is to indirectly understand customer information through units or individuals other than customers. There are generally the following methods of indirect investigation: investigate the registration and annual inspection of customers to the administrative department for industry and commerce where customers are located, and understand the nature of customers' enterprises, shareholder composition, business scope and operation period; Inquire the local tax authorities about the tax payment of customers in recent years; Investigate the ownership status of the property as the customer's business premises, including whether there is mortgage, etc. , to the real estate management department where the customer is located; Understand the industry status and business reputation of customers from social organizations such as industry associations. When signing a major contract, new and old customers should conduct necessary credit investigation, because the customer's operating conditions will constantly change with the changes of internal and external conditions. At the same time, standardize the relevant information of old customers and file it for inquiry. Second, the signing and performance of the contract during this period there are two main things to do. First, carefully review the terms of the contract; Make standard contract text and file it; Sign the contract memorandum in time and standardize the filing; Sign the statement in a timely manner in stages. The important role of this aspect mainly lies in providing the basis for the legal existence of creditor's rights and the legal content of creditor's rights. Specifically, the contents of the contract must be legal, complete and clear. If the contents of the contract are illegal, the contract will be invalid in whole or in part, and the creditor's rights will be difficult to realize; If the terms of the contract are incomplete or unclear, the contract may not be established due to the lack of necessary terms, or the contract may be terminated due to the unclear or no agreement on some matters. Thus, it lays a hidden danger for the disputes between the two parties to the contract and is not conducive to the realization of creditor's rights. Only the party who has fulfilled the obligation to deliver goods or provide services according to the contract and has not made payment to the other party can enjoy legal creditor's rights. Therefore, the fact that the legal relationship involved in the contract between the two parties has been established and the fact that the company has fulfilled its contractual obligations according to law (this fact is proved by the contract performance record voucher, which is generally a delivery note with complete procedures and a real VAT invoice issued by the company). ) is equally important. Only when both are complete can we prove that the company's creditor's rights are recognized and protected by law. Evidence of the legal existence of creditor's rights can ensure that creditors win litigation or arbitration. Its function is not only reflected here, but also its main function is to warn the debtor that the creditor's rights can be enforced in law, and failure to perform will bear corresponding legal responsibilities, thus prompting the debtor to perform its obligations in time according to law. The second is to take appropriate measures to protect the creditor's rights (exercising the right of security, the right of uneasy defense, the right of simultaneous defense and the right of defense afterwards). The significance of this aspect lies in reducing the risk that the legal creditor's rights cannot be partially or fully realized due to the reasons of the other party to the contract. Commercial competition or malicious transfer of the debtor may cause damage to the debtor's property. When the impairment is less than the sum of ordinary creditor's rights, the realization of ordinary creditor's rights will face great risks. 1, the correct exercise of security right will become one of the important guarantees to prevent this risk. When the company requests the creditor's rights guarantee, it should also consider the business opportunities. The other party to the contract is sometimes unwilling to provide guarantees, especially special guarantees (real estate mortgage, guarantee). If the company insists on the guarantee requirements. You may lose a business opportunity that looks good. Under such circumstances, we must carefully weigh the pros and cons and make a choice. Of course, if the following situations occur, the company should try its best to ask the other party to provide special guarantee: (1) The other party to the contract is a new customer; (2) The other party of the contract requests to increase the amount of the credit transaction, especially suddenly requests to increase the transaction amount; (3) The other party of the contract requests to change the transaction mode, such as extending the payment term or paying by installment; (4) There are major problems within the counterparty, such as a sharp decline in industry credit, major lawsuits, major mistakes in investment, major changes in key management personnel or criminal offences. 2. The correct exercise of the right of three defenses will also become one of the important guarantees to prevent this risk. (1), understanding of the correct exercise of uneasy right of defense. After the contract is signed, it usually takes some time to perform. During this period, if the party who should perform the obligations first in the contract finds that the financial situation of the other party has deteriorated or the other party has no ability to perform at all, the party who should perform the obligations first may temporarily suspend the performance of the contract and ask the other party to provide a guarantee for this, otherwise, the party who should perform the obligations first may terminate the contract. This right to suspend the performance of the contract is legally called the right of uneasy defense. In the contractual relationship of selling goods on credit, it is agreed that one party will deliver the goods first and the other party will pay for the goods within a certain period of time. If the observant party finds the evidence that the financial situation of the other party to the contract has deteriorated or that the other party is unable to perform the contract before or after the delivery of some goods, it can immediately stop the delivery, so as to avoid further losses caused by the irrecoverable payment. It should be noted that the observant party must have conclusive evidence to prove that the financial situation of the other party to the contract has deteriorated or that the other party to the contract has no ability to perform the contract before deciding to stop the supply. After deciding to stop the supply, it shall notify the other party in writing in time. If the other party to the contract provides a legal and effective guarantee after receiving the notice, the company must immediately resume the supply. (2) The understanding of the correct exercise of the right of defense and the establishment and correct exercise of the right of defense shall meet the following requirements: 1. The debts of both parties are generated by the same bilateral contract, and there is a consideration relationship between the debts of both parties. Article 66 of the Contract Law stipulates that "the parties owe each other debts, and if there is no order of performance, they shall perform at the same time", which is the confirmation of this requirement; 2. The other party fails to perform the debt or the debt performance does not conform to the agreement; The defendant failed to fulfill his obligations in advance. Only when the above three requirements are complete can the observant party require the other party to perform its contractual obligations at the same time. It should be noted that the right of simultaneous performance of defense shall not be exercised under the following three circumstances. 1, the law or contract stipulates that one party has the obligation to perform first; 2. The obligations of both parties are not implicated or have no consideration relationship; 3. At the same time, the exercise of the right of defense shall not violate the principle of good faith. (3) Understand the correct exercise of the right of defense to perform first. The right of defense to perform first refers to the right that one party who should perform first fails to perform or improperly perform, fails to perform or partially perform in a bilateral contract, and the other party enjoys it when performing. Article 67 of the Contract Law: "The parties owe debts to each other in order of performance. If one party fails to perform first, the other party has the right to refuse its performance requirements. If the first performing party does not meet the agreement, the second performing party has the right to refuse its corresponding performance requirements. " The provisions of this article reflect the right of defense after performance. The right of defense after performance can be applied to the following situations: 1. If the party who performs first fails to perform its obligations, the other party who performs later has the right not to perform the contract. For example, if the lessor fails to deliver the lease item, the lessee has the right not to pay the rent; 2. If the party who should perform first fails to perform the contract correctly, resulting in a fundamental breach of contract, the other party has the right not to perform. For example, if the supplier delivers counterfeit goods, the buyer has the right not to pay the purchase price; 3. If the party that should perform first fails to perform part of the performance correctly, the other party has the right to refuse to pay the unfulfilled part and only pay accordingly. For example, in a contract for the sale of 100 Mercedes-Benz cars, the seller only delivered 80 cars, and there is still a shortage of 20 cars, so the buyer should only pay the price of 80 cars and has the right not to pay the price of 20 cars. The effectiveness of correctly exercising the right of defense after performance and the aspects needing attention: the right of defense after performance is an extended right of defense, which only temporarily prevents the other party from exercising the right of claim, but not a permanent right of defense. If the other party has fully fulfilled its contractual obligations, and then the right of defense is eliminated, the parties shall perform their obligations, and failure to perform will constitute a breach of contract. Of course, if the performance of the contract is delayed due to the correct exercise of the right of defense by the parties, the responsibility for delayed performance shall be borne by the other party. It should be noted that in a bilateral contract, the performance of both parties is mostly carried out in sequence. The establishment of this performance order is either stipulated by law or agreed by the parties. In the absence of agreement between the two parties, the order of performance of bilateral contracts can be established according to trading habits. For example, if you eat in a restaurant, you have to pay after eating. Hotel accommodation, check out first. Fly, train, buy tickets first, then take them, and so on. If it is still impossible to determine who will perform the contract first according to the legal provisions, contract stipulations and trading habits, at this time, we can use methods such as guarantee to determine who will perform the contract first. For example, a sales contract, no one is willing to perform first, and the seller is not willing to deliver first, for fear that the buyer will not pay. In this case, the parties may agree that the bank will assist both parties in performance, and the buyer will transfer the payment to the bank first, and the bank will supervise the payment, and the seller will deliver the goods immediately. After the buyer accepts the payment, the bank will transfer the money to the seller. If the contract is performed in this order, it can ensure that the legitimate rights and interests of both parties are protected. Of course, this method needs to pay a certain fee to the bank, and at the same time, it needs to understand the bank's operation process in case the funds can't really be in place (there have been related fraud cases). 3. Recovery period for breach of contract: beyond the payment period agreed by both parties in the contract, the other party to the contract still fails to pay the payment, and fails to issue or sign written materials authorizing payment such as repayment plan, statement of account, supplementary agreement, etc., indicating that the observant party is unfortunately owed the payment in bad faith. At this time, the observant party shall immediately collect the default. The key to this work is to grasp the overdue payment information in time and accurately, and adopt flexible and diverse ways to collect it. 1, timely grasp the accurate information of overdue payment. The other party to the contract has the following circumstances, indicating that the payment is likely to be overdue: (1) Take various excuses as the reasons for not paying immediately within the payment period agreed in the contract, such as the subject matter is defective or defective, the subject matter is not in conformity with the contract, and the payment check has been sent; (2) Asking for deferred payment, installment payment, or issuing long-term bills of exchange or promissory notes. Due to temporary cash flow difficulties and other reasons; (3) In the case that the previous payment has not been paid off, it is required to continue to purchase goods on credit or increase the amount of credit transactions; At this point, the enterprise should try to investigate and understand the credit status and operation of the other party at that time, analyze whether the other party intends to pay overdue, and request to sign a repayment plan with the other party. On the one hand, confirm the real intention of the other party, on the other hand, prepare for the implementation of debt collection measures. 2. Take timely and effective ways to recover overdue funds. After the overdue payment is overdue, the enterprise can take the following three ways: the company's own recovery, litigation recovery and entrusted recovery. (1,) Understanding of the company's self-pursuit This method is the first choice of the observant party. In the process of self-pursuit, the first problem to be solved is the contradiction between subsequent business opportunities and today's payment. If the defaulting party defaults due to temporary economic difficulties and has a good repayment attitude, the observant party should clearly understand the attitude and take actions to help the other party tide over the difficulties. If the defaulting party's financial situation deteriorates, or there are serious difficulties in operation or major changes in senior management, then the observant party should closely observe the development of the other party to the contract. When the situation of the other party to the contract deteriorates beyond recovery, the observant party shall immediately take effective judicial procedures to recover it. Prevent the defaulting party from evading debts by fraudulent means such as withdrawing funds, transferring property, filing for bankruptcy or canceling enterprises. Another important aspect is that the statute of limitations for protecting creditor's rights in our country is two years, and the observant party has urged the other party to repay the debt or the other party has acknowledged the debt, which can have the legal effect of interrupting the statute of limitations, so that the lawful creditor's rights of the observant party are always protected by the right of victory in the process of self-pursuit. If there is no fact that the limitation of action is interrupted within two years, and the observant party does not file a lawsuit within these two years, the observant party will lose the right to win the case, and the law will no longer force the defaulting party to repay the loan to the other party, and the hope of the observant party to recover the default money will become very slim. (2) Understanding of litigation recovery: First of all, litigation recovery can obtain a judgment document that is protected by national laws and has enforcement effect. The observant party may apply to the court at any time within two years to enforce the property of the defaulting party, thus achieving the effect of deterring the defaulting party from making automatic repayment or passive repayment. (3) The understanding of entrusted collection means that the observant party entrusts a law firm and other institutions to recover the arrears. Entrusted collection can free the observant party from the complicated collection work and engage in normal company operations. Moreover, the observant party generally does not need to pay in advance to avoid double losses. In short, we should focus on the overall situation and start with small things to avoid the other party's breach of contract. The key point is to apply the law flexibly in the whole transaction process, and every small link should be engaged in according to law, so as to achieve good results in protecting their legitimate rights and interests.