Section 2 Guaranty Contract and Guaranty Mode
Article 13 The guarantor and creditor shall enter into a guaranty contract
in written form.
Article 14 The guarantor and creditor may enter into a guaranty contract
respectively as for a single master contract, and may also, within the
maximum
obligatory right amount as for a loan contract occurred continuously during
a
certain period or a commodity trade contract, enter into a guaranty contract.
Article 15 A guaranty contract shall contain the following contents:
1. the categories and amount of a master obligatory right guaranteed;
2. the time limitation to perform the debt by the debtor;
3. the guaranty mode;
4. the scope guaranteed by the guaranty;
5. the time period of guaranty; and
6. other items which the two parties consider necessary to agree.
If a guaranty contract has the contents prescribed in the proceeding
paragraph incomplete, it may be supplemented.
Article 16 The guaranty mode contains:
1. the general guaranty; and
2. the joint liability guaranty.
Article 17 That the parties in a guaranty contract agree that, when
the
debtor cannot perform the debt, the guaranty liability is to be borne
by the
guarantor, is the general guaranty.
The guarantor of a general guaranty may, without trial or arbitration
on the
disputes of a master contract, and before the debt cannot be performed
yet with
compulsory enforcement on the debtors' property according to the law,
refuse to
bear the guaranty liability for the creditor.
When there is any one of the following circumstances, the guarantor shall
not exercise the right prescribed in the proceeding paragraph:
1. the address of the debtor has changed, so that it becomes a major
difficulty for the creditor to demand him to perform the debt;
2. the people's court accepting a debtor's bankruptcy case, orders
suspension of execution procedure; or
3. the guarantor abandons the right described in the proceeding paragraph
in
written form.
Article 18 That the parties in a guaranty contract agree that the guarantor
and debtor bear the joint liability on a debt, is the joint liability
guaranty.
If the debtor of a joint liability guaranty cannot perform the debt at
the
date of expiration of the debt performance time limitation prescribed
in the
master contract, the creditor may demand the debtor to perform the debt,
and may
also demand the guarantor to bear the guaranty liability within the extent
of
guaranty.
Article 19 If no agreement or the agreement is not clear on the guaranty
mode by the parties, the guaranty liability shall be borne according to
the
joint liability guaranty.
Article 20 The guarantor of a general guaranty and joint liability guaranty
shall be entitled to have the counterplead right of the debtor. If the
debtor
abandons his counterplead right, the guarantor shall still be entitled
to have
right to counterplead.
The counterplead right means that the right of, when the creditor exercises
his obligatory right, the debtor according to legal reasons executing
the
petition right against the creditor.
Section 3 Guaranty Liability
Article 21 The guaranteed scope of a guaranty concludes the master
obligatory right and its interest, contractual fine, damage compensation
and
expense of credit realization. If there is an agreement otherwise in the
guaranty contract, it shall be complied with.
If no agreement or the agreement is not clear on the guaranteed scope
of a
guaranty by the parties, the guarantor shall bear the liability to the
entire
debt.
Article 22 During the time period of guaranty, where the creditor assigns
the master obligatory right to a third party according to the law, the
guarantor
continues to bear the guaranty liability within the original guaranteed
scope of
the guaranty. If there is an agreement otherwise in the guaranty contract,
it
shall be complied with.
Article 23 During the time period of guaranty, if the creditor wants
to
permit the debtor to assign the debt, he shall get the written consent
from the
guarantor, the guarantor bears no guaranty liability on the debt assigned
without his consent.
Article 24 If the creditor and debtor agree to change the master contract,
they shall get the written consent from the guarantor, without this written
consent, the guarantor bears no longer guaranty liability. If there is
an
agreement otherwise in the guaranty contract, it shall be complied with.
Article 25 If no agreement on guaranty period between the guarantor
and
creditor of a general guaranty, the guaranty period shall be 6 months
from the
date of expiration of the master debt performance time limitation.
During the guaranty period agreed in the contract or described in the
proceeding paragraph, if the creditor has not filed a case against the
debtor or
applied for the arbitration, the guarantor shall be exempted from the
guaranty
liability; if the creditor has filed a case or applied for the arbitration,
the
guaranty period shall be applied to the provisions on the discontinuance
of
limitation of action.
Article 26 If no agreement on a guaranty period between the guarantor
and
creditor of a joint liability guaranty, the creditor shall be entitled
to have
the right within 6 months from the date of expiration of the master debt
performance time limitation to demand the guarantor to bear the guaranty
liability.
During the guaranty period agreed in the contract or described in the
proceeding paragraph, if the creditor has not demanded the guarantor to
bear
guaranty liability, the guarantor shall be exempted from the guaranty
liability.
Article 27 The guarantor shall make a guaranty on a credit occurred
continuously according to the provisions of Article 14 in this law, if
no
agreement on guaranty time period, the guarantor may at all times inform
the
creditor in written form to terminate the guaranty contract, however the
guarantor shall, as for the credit occurred before having informed the
creditor,
bear guaranty liability.
Article 28 Where there are both a guaranty and a guarantee of real right
on
a same obligatory right, the guarantor shall bear the guaranty liability
on the
obligatory right except the guarantee of real right.
If the creditor abandons the guarantee of real right, the guarantor shall,
within the scope of right abandoned by the creditor, be exempted from
the
guaranty liability.
Article 29 Where a branch of an enterprise as a legal person enters
into a
guaranty contract with the creditor without written delegation from the
enterprise as legal person or exceeding the extent of delegation, this
contract
shall be invalid or the part exceeding the extent of delegation shall
be
invalid; if the creditor and the enterprise as legal person has default,
they
shall bear the relevant civil liability according to their fault respectively;
if the creditor has no default, the civil liability shall be borne by
the
enterprise as legal person.
Article 30 If there is any one of the following circumstances, the
guarantor shall not bear the civil liability:
1. the parties of the master contract collude to defraud the guarantor
to
offer a guaranty; or
2. the creditor of the master contract take means of fraud or coercion
to
force the guarantor to offer a guaranty against his true intention.
Article 31 After the guarantor has borne the guaranty liability, he
shall
be entitled to claim repayment from the debtor.
Article 32 After the people's court accepts a debtor's bankruptcy case,
if
the creditor does not declare his obligatory rights, the guarantor may
take part
in the bankrupted property distribution, exercise the right to claim repayment
in advance.GO TO TOP
Section 1 Mortgage and Gage
Article 33 The mortgage prescribed in this Law, means a guarantee that
a
debtor or a third party does not transfer the possession of the property
listed
in Article 34 in this Law, make the said property as obligatory right.
When the
debtor does not perform the debt, the creditor shall be entitled to have
right
to keep the said property to offset the debt or have priority in satisfying
his
claim out of proceeds from the auction, sale of the said property pursuant
to
the provisions of this Law.
The debtor or third party prescribed in the proceeding paragraph shall
be
the mortgagor, the creditor shall be the mortgagee, the property offered
to
guarantee shall be the gage.
Article 34 The following properties may be mortgaged:
1. the house and other land fixtures owned by the mortgagor;
2. the machine, transportation means and other property owned by the
mortgagor;
3. the state-owned right to the use of land, house and other land fixtures
which the mortgagor is entitled to dispose of pursuant to the law;
4. the state-owned machine, transportation means and other property which
the mortgagor is entitled to dispose of pursuant to the law;
5. the right to the use of land on the unreclaimed land such as unreclaimed
mountains, unreclaimed valleys, unclaimed hills or unreclaimed beaches
which is
contracted for management by the mortgagor in accordance with law and
is agreed
to mortgage by the contractee; or
6. other property which may be mortgaged in accordance with the law.
The mortgagor may mortgage the properties listed in the proceeding paragraph
all together.
Article 35 The obligatory right guaranteed by the mortgagor shall not
exceed the value of the gage.
After the property is mortgaged, the surplus part that the said property
is
more than the obligatory right guaranteed, may be mortgaged once more,
but shall
not exceed the surplus part.
Article 36 If the house upon the state-owned land obtained according
to the
law is to be mortgaged, the right to the use of the state-owned land within
the
scope the house occupies shall be mortgaged at the same time.
If the right to the use of state-owned land obtained by way of transfer
according to the law, when mortgaged the house upon the said state-owned
land
shall be mortgaged at the same time.
The right to the use of land of enterprises of a township (town) or village
shall not be mortgaged separately. If the buildings of enterprises of
township
(town) or village such as a plant is to be mortgaged, the right to the
use of
the land within the scope it occupies shall be mortgaged at the same time.
Article 37 the following properties shall not be mortgaged:
1. the ownership of land;
2. the ownership of the lands owned by collectives such as cultivated
land,
house sites, private plots of cropland and hilly land shall not be mortgaged,
except that prescribed in item 5 of Article 34, paragraph 3 of Article
36 of
this Law;
3. the facilities for education, the facilities for public health and
medicine and other facilities for social benefit of the institutions or
social
units for purpose of public interest such as schools, kindergartens or
hospitals;
4. the properties whose ownership or right to use is uncertain or in
dispute;
5. the properties sealed up, distrained or regulated; or
6. other properties which shall not be mortgaged pursuant to law.
Section 2 Mortgage Contract and Gage Registration
Article 38 The mortgagor and the mortgagee shall enter into a mortgage
contract in written form.
Article 39 A mortgage contract shall contain the following contents:
1. the categories and amount of master obligatory right guaranteed;
2. the time limitation to perform the debt by the debtor;
3. the name, quantity, quality, situation, address, ownership or right
to
the use of the gage;
4. the extent guaranteed by the mortgage; and
5. other items the parties consider necessary to agree.
If a mortgage contract has the contents prescribed in the proceeding
paragraph incomplete, it may be supplemented.
Article 40 When entering into a mortgage contract, the mortgagor and
the
mortgagee shall not agree that, when the mortgagee is not satisfied at
date of
expiration of the time limitation for the debt performance, the ownership
of the
gage is to be transferred to the creditor.
Article 41 Where the parties take the properties prescribed in Article
42
of this Law to mortgage, he shall go through the gage registration, the
mortgage
contract shall be effective as the date of registration.
Article 42 The departments handling the gage registration are as follows:
1. in case that the right to the use of land without fixtures upon the
land
is to be mortgaged, it shall be the land administration departments which
upon
verification issue certificates for the right to the use of land;
2. in case that the city real estates or the building of the township
(town)
or village enterprises such as a plant is to be mortgaged, it shall be
the
departments prescribed by the local people's governments at and above
the county
level;
3. in case that the woods are to be mortgaged, it shall be the forestry
administration departments at and above the county level;
4. in case that aircraft, vessels or vehicles are to be mortgaged, it
shall
be the registration departments for transportation means; or
5. in case that the equipment or other movables of a enterprise are to
be
mortgaged, it shall be the administrations of industry and commerce where
the
properties are located.
Article 43 Where the party takes other properties to mortgage, he may
go
through the gage registration on a voluntary basis, the mortgage contract
shall
be effective as the date of registration.
The party who has not handled the gage registration shall not be opposed
to
a third party. If the party goes through the gage registration, the registration
department is to be the notary department of the area where the mortgagor
is
located.
Article 44 When the gage registration is to be handled, the following
documents or their copies shall be produced to the registration department:
1. the master contract and the mortgage contract; and
2. the certificate of ownership of or right to the use of the gage.
Article 45 The information registered by the registration department
shall
be allowed