Case analysis of disputes over the invalidity of guarantees in loan contracts
Due to some uncertain factors, loan contract disputes often arise. Below I will first bring you a case of disputes over invalidity of guarantees in loan contracts. Relevant knowledge explanations are welcome to read.
Case Analysis of Invalidity of Guarantee in Loan Contracts
Case
On February 26, 1992, Shennan Company signed a loan contract with ICBC. According to the contract, ICBC lent USD 1.8 million to Shennan Company, and the loan period was from February 28, 1992, the date of the first payment, to August 28 of the same year. The entire principal and interest of the loan must be repaid in 6 months; Shennan Company must repay USD 1 million on June 28 of the same year and USD 800,000 on August 28 of the same year. The borrowing interest rate is a fixed annual interest rate of 4.9375%; the purpose of the loan is to import ABS Plastic; if a loan is misappropriated, a penalty interest of 50% will be paid on the misappropriated portion of the loan on the basis of the original loan interest rate; if the borrower fails to repay the loan on time, the lender has the right to deduct it from the borrower's other accounts, and the overdue portion will be deducted from the overdue portion. An additional 20% interest will be charged from that date. The Municipal Foreign Economic and Trade Commission provided guarantee for this loan contract. After the contract was concluded, ICBC lent US$1.8 million to Shennan Company as agreed. After the loan expired, Shennan Company did not repay it. On July 2, 1992, and September 21 of the same year, ICBC deducted US$484.3689 million from Shennan Company's account as part of the interest paid by Shennan Company. On May 13 of the same year, Shennan Company borrowed another RMB 2.2 million from ICBC with a term of 6 months and an annual interest rate of 7.74%, which was to be repaid on November 12 of the same year. The Municipal Foreign Economic and Trade Commission provided guarantee for this loan contract. After the contract was concluded, ICBC lent RMB 2.2 million to Shennan Company as agreed. Shennan Company failed to repay the loan within the time limit stipulated in the contract, and ICBC agreed to extend its loan repayment for six months until May 12, 1993. After expiration, Shennan Company repaid RMB 600,000 and bank interest on the loan for the same period in the third quarter of 1994, leaving RMB 1.6 million outstanding. The Municipal Industrial and Commercial Bank of China pursued the loan and filed a lawsuit in court on August 28, 1994. The petition requested a court to order Shennan Company and the Municipal Foreign Economic and Trade Commission to immediately repay the loan of US$1.8 million and RMB 1.6 million, and bear the responsibility for paying interest and overdue repayment.
The actual user of the US$1.8 million loan Shennan Company borrowed from ICBC was Hong Kong Wynning International Development Co., Ltd. (hereinafter referred to as Wynning Company). During the borrowing process, Yonglining Company issued a power of attorney to Shennan Company, entrusting Shennan Company to borrow US$1.8 million from ICBC on its behalf. However, Shennan Company did not present a power of attorney to ICBC, and ICBC did not receive any formalities from Lining Company.
Relevant knowledge introduction
1. Loan contract
A loan contract is an agreement between the parties that one party will transfer the ownership of a certain type and amount of currency to another party, and the other party will A contract to return the same type and amount of currency within a certain period of time. Among them, the party that provides money is called the lender, and the party that receives the money is called the borrower.
Characteristics of a loan contract
(1) The subject matter of a loan contract is money. The subject matter of a loan contract is money as a special kind of thing. Therefore, in principle, only delay in performance occurs, but no impossibility of performance occurs.
(2) The loan contract is a contract to transfer currency ownership. When the lender hands over the money, i.e., the currency, to the borrower, the ownership of the currency is transferred to the borrower, and the borrower can dispose of the received currency. This is determined by the purpose of the loan contract, and is also the inevitable result of currency, a special type of object, being its subject matter.
(3) Loan contracts are generally paid contracts (interest-bearing loans), or they can be free contracts (interest-free loans).
(4) Loan contracts are generally formal contracts and should be in written form. The form of a loan contract between natural persons may be agreed upon by the parties.
2. Liability for breach of contract
Borrower’s liability for breach of contract:
(1) If the borrower does not use the loan for the purpose specified in the contract, the lender has the right to take it back For part or all of the loan, penalty interest will be charged based on the interest rate specified by the bank for the portion used in default. In serious cases, banks may stop issuing new loans within a certain period of time.
(2) If the borrower fails to repay the loan overdue, the lender has the right to recover the loan and charge penalty interest in accordance with bank regulations. If the borrower repays the loan in advance, interest shall be charged (plus or minus) according to regulations.
(3) If the borrower uses the loan to cause losses and waste or uses the loan contract to engage in illegal activities, the lender should recover the principal and interest of the loan, and the relevant units should hold those directly responsible for administrative and economic responsibility. If the circumstances are serious, criminal responsibility will be investigated by the judicial authorities.
The lender’s liability for breach of contract:
(1) If the lender fails to provide the loan on time, it shall pay the borrower liquidated damages based on the default amount and the number of days of extension. Calculation of the amount of liquidated damages The calculation should be the same as the penalty interest charged to the borrower.
(2) Employees of banks and credit unions who cause loan losses and waste due to dereliction of duty or use loan contracts to engage in illegal activities should be held administratively and economically responsible. If the circumstances are serious, criminal responsibility should be investigated by the judicial authorities.
Article 9 Methods for resolving contract disputes: Any dispute arising from the execution of this contract shall be resolved through negotiation between the parties. If negotiation fails, both parties agree to submit the dispute to arbitration by an arbitration committee or to file a lawsuit in the People's Court.
3. Guarantee of the loan contract
The so-called guarantee of the loan contract means that when the lender issues a loan to the borrower, the borrower needs to provide certain things or people as collateral for the loan. Guarantee is a type of loan in which the guarantor must pay off the debt on behalf of the borrower when the borrower is unable to perform its contractual obligations, or the lender will convert the collateral provided by the lender or a third party into a preferential repayment. In the past few years, when many banks in our country borrowed money, they often failed to repay the money. Banks and other financial institutions are increasingly adopting guaranteed loans. After state-owned banks are converted into commercial banks, all loans will be guaranteed. Article 7 of the "Commercial Banks" clearly stipulates this: When conducting lending business, commercial banks shall strictly examine the credit standing of borrowers, implement guarantees, and ensure that loans are recovered on time. ?Article 36 further stipulates:?Commercial bank loans must require the borrower to provide guarantees, and strict examinations must be conducted on the guarantor's repayment ability, the ownership and value of the mortgages and pledges, and the possibility of realizing mortgage rights and pledge rights. . ?The guarantee of the loan contract can ensure the smooth realization of the creditor's rights, and for the debtor, it urges him to consciously perform his debts in a timely manner.
Legal provisions for loan guarantees
Article 198 of the "Contract Law of the People's Republic of China" stipulates that when entering into a loan contract, the lender may require the borrower to provide guarantee. The guarantee shall be in accordance with the provisions of the Guarantee Law of the People's Republic of China.
Guarantee is an important civil legal system that emerged with the development of the commodity economy. In 1986, the General Principles of Civil Law of my country stipulated the principles of guarantee. In 1995, the Guarantee Law was formulated on the basis of summarizing the practical experience of my country’s guarantee system and drawing on common foreign practices. According to the provisions of the Guarantee Law of the People's Republic of China and the State, in the loan contract, the lender may require the borrower to adopt the following guarantee methods:
1. Guarantee. Guarantee refers to the agreement between the guarantor and the lender that when the borrower fails to perform the debt, the guarantor will perform the debt and assume responsibility in accordance with the agreement. There are two main ways of guarantee. One is joint liability guarantee, that is, the lender and the guarantor agree that if the borrower fails to perform the debt at the expiration of the loan period, the lender can require the borrower to perform the debt, or the guarantor can be required to perform the loan within the scope of its guarantee. Bear warranty responsibilities. The second is a general guarantee, that is, the lender and the guarantor agree that if the borrower fails to fulfill its debt after trial or arbitration and enforcement against the borrower's property, the guarantor shall bear the guarantee liability.
2. Mortgage. It means that the borrower or a third party does not transfer the possession of the property specified by law and uses the property as a guarantee for the creditor's rights. When the borrower fails to perform its debts, the lender has the right to discount the property or use the proceeds from the auction or sale of the property to receive priority repayment in accordance with the law.
The scope of the mortgage should be property that can be transferred in accordance with the law, and the mortgage contract should be registered, and the mortgage contract will take effect from the date of registration.
3. Pledge. Including movable property pledge and rights pledge. A movable property pledge means that the borrower or a third party transfers his or her movable property to the lender for possession, and uses the property as a guarantee for the creditor's rights. If the borrower fails to perform the debt, the lender has the right to preferentially receive repayment from the price of the movable property or the price from auction or sale. . Rights pledge refers to the transfer of property rights other than ownership as a security method for pledge. The following rights can be pledged: bills of exchange, checks, promissory notes, bonds, deposit receipts, warehouse receipts, bills of lading; legally transferable shares and stocks; legally transferable trademark exclusive rights, patent rights, property rights in copyrights and other rights.
After the lender pays the loan to the borrower, all risks are borne by the lender. In order to ensure the realization of claims and reduce the risk of borrowing, in recent years, our country's financial institutions have increasingly adopted guarantees in credit business. According to the relevant provisions of the Commercial Banking Law. For commercial bank loans, the borrower must provide guarantees. Commercial banks shall conduct a comprehensive review of the guarantor's repayment ability to determine whether the guarantor has truly provided the guarantee; identify and verify the ownership and value of the mortgaged and pledged properties, ascertain their property rights certificates and ensure the realization of the mortgage and pledge rights. Possibilities are subject to rigorous scrutiny. Only if the commercial bank has reviewed and evaluated the borrower and confirmed that the borrower has good credit and can indeed repay the loan, no guarantee can be provided. Therefore, when a financial institution borrows money, the parties concerned shall determine the form of guarantee in accordance with relevant regulations. In the case of borrowing between natural persons, the parties may agree on security issues based on the actual situation.
4. The statute of limitations for a loan contract
(1) The statute of limitations starts from the first time you claim your creditor’s right, but it cannot exceed 20 years from the date of the loan. ~~Of course you can claim that it has exceeded 20 years, but the debtor can refuse to perform the debt on the grounds that the maximum protection period has exceeded, which has no practical significance.
(2) Let’s talk about the issue of proof. Because this loan contract is an ordinary creditor’s right and debtor relationship, the normal burden of proof system applies, that is, whoever claims it has to give evidence. If you want to prove that you are constantly claiming creditor’s rights, then just It may be up to you to prove that the debtor has no obligation to prove this;
In practice, the simplest and most effective way to provide proof is to if the other party promises a repayment period every time a claim is made, It is also reasonable to ask the other party to leave a note~~ If the other party refuses to perform the repayment obligation, you can take legal action to resolve it
(3) Within two years from the date of the commitment period, you can To achieve the purpose of interrupting the statute of limitations by claiming credit again, the same cannot exceed the limit of 20 years
(4) As for the borrowing interest rate, as long as you choose between the upper and lower limits of the borrowing interest rate specified by the state, The law will support it~~The law does not protect the excess, but the debtor is willing to fulfill the obligation and the court will not force intervention
The "General Principles of the Civil Law" stipulates a 2-year statute of limitations for loan disputes, but the 2 years referred to here are not It is not calculated simply from the date of borrowing, but from the moment when the person knew or should have known that the right had been infringed. Article 141 of the "General Principles of the Civil Law" stipulates: "The statute of limitations is interrupted due to the filing of a lawsuit and one of the parties making a request or agreeing to perform its obligations. From the time of interruption, the statute of limitations shall be recalculated." Whether the statute of limitations has expired shall depend on the specific circumstances.
5. Introduction to the evidence for lending disputes
After a dispute occurs in private lending, you should first confirm whether the loan relationship is established and whether the loan contract is valid. In the absence of a written contract, when the parties dispute whether a loan relationship exists, the party claiming the existence of a loan relationship shall bear the burden of proof. If the existence of a loan relationship can be proven, the case will be tried as a private loan case.
In trial practice, it is rare for the lender and the borrower to enter into a loan contract in the form of a contract, and the IOU is the most common litigation evidence in private loan cases. An IOU is actually a loan agreement. It can not only prove the true situation of the case, but also reflect the existence of the creditor-debt relationship. Of course, this also involves the review and identification of key evidence in the IOU.
As long as it can prove the true situation of the case and reflect the existence of the creditor-debtor relationship, some IOUs may have incomplete records, but the subject and amount of the loan are clear, and the basic facts can be proved and can become litigation evidence.
If the lender can provide an IOU written by the borrower to prove the existence of a creditor-debt relationship, then this is strong evidence. If there is no IOU or loan contract between the parties, the plaintiff only files a lawsuit in court based on the oral loan relationship as a factual basis. In other words, if the plaintiff provides an IOU or a loan contract, which clearly indicates the existence of a creditor-debt relationship, but the other party provides corresponding defense evidence, which complicates the case and makes it difficult to identify the loan relationship, the court should pay attention to the standard of proof of litigation evidence during the trial. . For example, if the loan agreement is reached verbally between the parties, it should be comprehensively determined based on the statements of the parties and other relevant evidence. If there is other relevant evidence that corroborates the plaintiff's statement, the lender's statement and relevant evidence can be recognized. However, if the borrower denies what the lender states, it cannot support its claim. Regarding this point, the key is to carefully examine the probative validity of the evidence provided by the parties. It is necessary to fully examine the documentary evidence provided by the parties, but not to ignore other relevant evidence, and to ensure a comprehensive determination based on the relevance of the evidence.
In addition, "debt collection" has a statute of limitations, which means that if you do not claim your rights within two years of the deadline for the other party's failure to fulfill its repayment obligations, you will lose the chance to win the lawsuit. ;