Legal Analysis on Rigid Payment of Commercial Trust

DOI

10.2991/assehr.k.211220.146How to use a DOI?

Keywords

Trust Relationship; Rigid Payment; Illegal and Invalid; Normative Purpose Theory

Abstract

This paper analyzes the causes of formation of rigid payment from the business perspective and the non-commercial perspective. In the first place, rigid payment is the competitive means in the early development of trust, when trust companies won investors’ trust with rigid payment agreement. Secondly, the reasons for rigid payment also include avoiding mass disturbances. Administrative organs often force the trust institutions to pay by administrative instruction. The harm of rigid payment mainly lies in causing systemic financial risks and the happening of “bad money driving out good money” in which bad trust runs on good trust, making it impossible for normal trust market to establish its order. As for the legal consequences of rigid payment, according to the Normative Purpose Theory of Germany’s Civil Law in regard to invalidity of legal acts, the legal prohibition against rigid payment should be considered as Content Prohibition. The invalidity of rigid payment should be deemed as invalid, if it is illegal, while the payment that does not violate the normative purpose of legal prohibitions should not be judged as invalid.

Copyright

© 2021 The Authors. Published by Atlantis Press SARL.

Open Access

This is an open access article under the CC BY-NC license.

Download article (PDF)

TY  - CONF
AU  - Shuaifei Lyu
PY  - 2021
DA  - 2021/12/24
TI  - Legal Analysis on Rigid Payment of Commercial Trust
BT  - Proceedings of the 2021 4th International Conference on Humanities Education and Social Sciences (ICHESS 2021)
PB  - Atlantis Press
SP  - 851
EP  - 854
SN  - 2352-5398
UR  - https://doi.org/10.2991/assehr.k.211220.146
DO  - 10.2991/assehr.k.211220.146
ID  - Lyu2021
ER  -