China is now promoting industrial upgrading, and industrial upgrading is inseparable from the upgrading of production equipment, and upgrading of production equipment requires the use of a large amount of funds, and many enterprises are under financial pressure. At this time, financial leasing can be used to solve the financial pressure, then under what circumstances can the financial leasing contract be lifted?

Under what circumstances can a financial lease contract be terminated?

In the process of fulfilling the financial lease contract, one party breaches the contract, and in general, the financial lease contract is not automatically terminated. The termination of the contract should be decided by the injured party, but in one of the following cases, the termination of the lease contract is permitted.

1. The lessor and lessee shall be terminated with the consent of consultation, but the interests of the supplier shall not be impaired.

2. Disbandment, cancellation and bankruptcy of the lessor or lessee occur.

3. One of the lessors, lessees and suppliers has seriously violated the contract agreement, thus rendering the contract practically impossible to perform.

4. Force majeure occurs during the performance of the contract.

5. The termination of the contract is agreed upon.

6. The circumstances of permissible rescission stipulated by laws and regulations.

In the process of fulfilling the financing contract, the lessor is damaged because of the lessee's reasons. When this happens, the lessor generally does not take the means of rescinding the contract, but requires the lessee to pay all the rent and continue to perform the contract when it is objectively possible to continue to perform.

What legal risks exist in financial leasing

1. The lessee and buyback have misunderstandings about the legal relationship of financial lease.

The quality of leased goods has major defects, which is one of the common reasons for the tenant's defense in practice. Some lessees confuse financial lease with ordinary lease, or mistake it as a loan relationship or a business relationship. Others lack contract consciousness and ignore the quality inspection of lease delivery and sign and accept leases directly. The buyback person, driven by the sales interests, undertakes the buyback responsibility for the lessee's breach of contract, but fails to predict and control the legal risk of the buyback. It is not uncommon for the buyback person to choose to refuse to take the buyback responsibility. The misunderstanding of the nature of the legal relationship of financial lease between lessee and buyback is an important reason for the flaws or disputes in the performance of financial lease.

2. There are omissions in the credit examination, delivery supervision and tracking service mechanism of the lessor

In the process of contracting, the lessor has not established a perfect and meticulous credit review and risk management mechanism. Some business personnel, driven by sales performance, attach more importance to the number of projects than to the qualification review. The credit status of the lessee is uneven, which increases the probability of bad debts and other financing risks. In the process of fulfilling the contract, the lessor neglects to supervise the delivery of the leased goods, even colludes with the lessee and the seller, fabricates the leased goods and false delivery, and arbitrates the lessor's funds. In the process of lease use, the lessor neglects the tracking service after financing, and the tendencies of deterioration of the lessee's business fail to detect and take measures in time. The problem of lease risk is particularly prominent. The phenomenon of the unaccountable whereabouts of lease items and the unauthorized transfer of lease items by the lessee to a third party occurs from time to time.

3. Unknown contract agreement

Financial leasing contracts are generally format contracts formulated and provided by lessors in advance, but the lessor has not made clear and definite agreement on some business terms and controversial issues. For example, the contract stipulates that the lessee must pay down payment and deposit to the lessor at the time of signing the contract, but the nature and use of the money are not clearly defined; for example, there is no clear agreement on the evaluation method and estimation method of the residual value of the leased property in the contract, and the lessor and the lessee often exist on this issue. There are great differences and disputes; furthermore, the contract usually stipulates that the Lessor will transfer the right to claim from the seller to the lessee, which only has the obligation to assist in the claim, but there is no clear agreement on how the Lessor will perform the obligation to assist in the claim.

4. Business model innovation enlarges risk

In order to guarantee the safety of financing and financing, the lessor innovates business measures, such as requiring the manufacturer or distributor of the leased property to buy back the leased property when the lessee defaults, the Lessor agrees to the lessee to entrust the distributor to transfer the rent, etc., but because the legal nature of the repurchase contract is unclear, the distributor fails to transfer the rent to the lessor in time or even Interception of rents and other circumstances, resulting in the lessor and lessee contract risk has been artificially expanded, burying hidden dangers for the emergence of disputes.