Problems In Practice: Realization Of Pledge Right

Like other hypothecation, the Pledgee of the accounts receivable shall have the right to give priority to the accounts receivable when the agreed exercise of the pledge. Because accounts receivable is essentially a kind of creditor's rights, pledge of accounts receivable is actually a kind of creditor's right to guarantee the realization of another creditor's right. Therefore, the realization of pledge of accounts receivable requires the combination of the nature and performance of debt receivable. The debtor's ability to perform and the enthusiasm to perform are crucial to the realization of the pledge. In fact, there is no legal basis for the pledgee to claim rights directly against the debtor. Even if the right of subrogation can be exercised in accordance with the provisions of the contract law, it is also necessary to proceed through litigation.

In addition to debtor factors, the pledgor's partial or total abandonment of his creditor's rights, or his inability to exercise his contractual rights as a creditor to the debtor, or his inability to perform his corresponding obligations, leads to the debtor's exercise of the right of defense, which will affect the realization of the right of pledge.

In addition, as a kind of claim, the accounts receivable that have been pledged can not be of course cut off the plea of the debtor of the account receivable (such as invalid plea, revocable defences, plea of limitation of action, counterplea at the same time, and the reduction of the plea of price because of the quality defects of the subject matter). This makes the uncertainty of pledge right further increase.

In order to avoid these risks, the pledgee may consider setting up the corresponding clauses in the pledge contract, such as asking the pledgee not to make the right to set off the contract, not to alter the contract without authorization, to cancel or cancel the creditor's right without authorization, to exercise or abandon the creditor's right, and so on, and to restrict the pledgee. In addition, banks may be entrusted with the supervision of accounts receivable, that is, the pledge authority, the pledgee and the regulatory bank sign the account supervision contract. The pledgee opens a special account in the supervision bank, which is specifically used to collect accounts receivable, while the supervision bank controls the collection and use of accounts receivable in the special account according to the contract.

Though Law Such a provision, however, is not required due to the transfer of claims. register And other procedures, accounts receivable pledge registration can only make the pledge effective, and can not restrict the transfer of accounts receivable. If the pledgor does not agree with the pledgee, the accounts receivable shall be transferred to the bona fide third party. For the purpose of solving the conflict of interests between the bona fide third party and the Pledgee of the accounts receivable, the property law has not made clear provisions, and the pledgee claims to have priority in compensation, which lacks a clear legal basis. Even if the pledgee can claim that the transfer is invalid according to the provisions of the property law, no matter whether the third party is good will, it may also have to go through a lengthy litigation process. It still increases the cost of the pledge of the pledgee and the risk that the pledge can not be realized.

and Accounts receivable Similar transfers are offset. In accordance with the provisions of the contract law, the parties may notify each other of their debts and the debts of the other party, except that the parties have the same type of debt and the same maturity debt. The notice will come into effect on arrival. The property law only stipulates that the quality accounts receivable shall not be transferred, and the cancellation of accounts receivable claims shall not be explicitly prohibited. Whether the pledge of accounts receivable can fight the statutory right of cancellation should be further clarified by law and judicial practice. In practice, if the pledgee offsets the accounts receivable debt, it also causes the pledgee to face the risk that the pledge can not be realized.