Legal analysis of rent components in financial lease contracts

An introduction to the legal analysis of rent components in financial lease contracts：This article combines the provisions of Article 243 of the Contract Law with the trial opinions of the "Hewlett-Packard Leasing Co., Ltd. v. Tai'an City, Shandong Province Siwei Pharmaceutical Factory and other financial lease contract disputes over arrears" case，Analyzing the elements of financial leasing’s rent from the perspective of its legal and economic substance。

This article clarifies that rent should be determined based on the lessor’s “financing costs” and “reasonable profits”，Service fees agreed in the contract、handling fee、Management fees and other amounts can be classified as "financing costs" based on their nature.、"reasonable profit"。

one、Introduction September 23, 2002，The Shenzhen No. 1 Intermediate People's Court issued the (2002) Civil Judgment No. 45 of Hu Yi Zhong Min Si (Shang) Chu Zi in the case of "HP Leasing Co., Ltd. v. Tai'an City, Shandong Province Siwei Pharmaceutical Factory and other financial lease contract arrears disputes"。The judgment qualifies the "service fee" in the financial lease contract.，It is of great significance for determining the composition of rent in financial leases.。

two、Case review August 15, 2000，The plaintiff Hewlett-Packard Leasing Co., Ltd. and the defendant Siwei Pharmaceutical Factory in Tai'an City, Shandong Province signed a "Financial Lease Agreement" and its schedule，It was agreed that the plaintiff would provide financial leasing services to the defendant，The defendant paid rent on time。The agreement stipulates，The price of the equipment is 13,817,

1. 42Genwa 5,436,
2. 00Yuan，and agreed on the rental amount for each period。

October 25 of the same year，The defendant confirmed receipt of the equipment provided by the plaintiff on the receipt form。after，The defendant breached the agreement and failed to pay the rent。The contention in this case is，Can the service fee be an integral part of the equipment price as the basis for calculating the rental?，Whether the plaintiff has legal basis to charge the

cost

。

three、Court opinion Shenzhen No. 1 Intermediate People’s Court held that，The two parties agreed on the service fee as part of the equipment price in the schedule of the Financial Lease Agreement.，The defendant had no objection at the time，According to the provisions of Article 243 of my country’s Contract Law，The law does not clearly stipulate whether the rent in a financial lease contract should include service fees，and allows both contracting parties to "agree otherwise"，Therefore, the two parties agreed on the service fee as part of the equipment price in the schedule of the Financial Lease Contract and as an integral part of the rent.，does not violate legal provisions。

Therefore，Court upholds service charge claim。Four、Legal analysis in financial leasing，The lessor purchases the leased property based on the lessee’s selection，and provided to the lessee in the form of lease，The lessee pays the corresponding rent。2The difference from traditional (operating) lease contracts is that，The rent in the financial lease contract is not only the consideration for the use of the leased object，It is also the consideration for “financing”。

3From an economic substance perspective，The lessor in a finance lease is most concerned about the recovery of “financing payments”，The lessee's possession and use of the leased property is actually the possession and use of the funds provided by the lessor.，That is, the rent paid by the lessee is the consideration for occupying and using the lessor's "financing money"。therefore，Determination of rent components in financial lease contracts，The standard for determining the rent component in a traditional lease contract is different.。

According to the provisions of Article 243 of the Contract Law，"The rent in the financial lease contract，Unless otherwise agreed by the parties，It should be determined based on most or all of the cost of purchasing the leased property and the lessor’s contract profit.”，The rent composition in a financial lease contract should consider the following two factors:：

1. Most or all of the cost of purchasing a leasehold property，That is, the lessor’s “financing cost”；
2. Lessor’s “reasonable profit”。

In the “financing cost” factor，The funds and interest paid by the lessor to purchase the leased property，It will be recovered in installments from subsequent rents；at the same time，Other expenses paid by the lessor during the purchase process

cost

，such as taxes、insurance、Shipping and miscellaneous charges、Installation fee and shared business

cost

，This "financing cost" should also be included in the，and be compensated from rent。

Judging from the description of the “service fee” in the judgment of this case，This amount should belong to the "other items" in the aforementioned purchase process.

cost

”。The lessor uses the leased property as a carrier to provide consideration for "financing money"，i.e. "reasonable profit"，This part is often expressed as interest on "financing costs" (principal)，This is also the fundamental purpose of the lessor’s financial leasing transaction.。

in this case，The trial court also relied on the provisions of Article 243 of the Contract Law，Treat the service fee as part of the "financing cost" according to its nature and the autonomy of the parties ("otherwise agreed")，as part of the rent。

This trial opinion also fully reflects the trial court’s understanding of the economic substance of financial leasing.，The rent in a finance lease is the consideration of "financing payment"，Unlike traditional leasing, rent，Its composition should be based on the lessor’s financing costs and profits。

It is worth mentioning that，In the "Civil Judgment" 4 of the "Appeal Case of the Financial Lease Contract Dispute between Zhang Yaopeng and Lonking (Shenzhen) Financial Leasing Co., Ltd."，For the “down payment” made by the lessee during the equipment purchase process，The Intermediate People’s Court of Nanyang City, Henan Province (Court of Final Appeal) held that “the down payment paid by the lessee is not a consideration for the benefits from the use of the leased property.，It’s the cost of financing，Rent is actually the principal and interest paid by the lessee in installments to the lessor for the purchase price of the leased object and the profits it should obtain, etc.

cost

"repayment"。

visible，The nature of various types of payments in financial leases should be analyzed from the perspective of their economic substance，Rather than simply applying the concept of rent in traditional leasing。

in addition，In the actual operation of financial leasing，In addition to the service fees included in the "financing costs" (i.e. other costs incurred during the purchase process

cost

)outside，There are often handling fees based on the financing amount.、Management fees, etc.，And it does not belong to the actual costs incurred in the purchase process of the leased property；This type of payment is generally calculated based on a certain percentage of the financing amount.，and pay on time。

The author thinks，Such fees、In essence, management fees and other payments are still part of “rent”，Just change the name，According to the provisions of Article 243 of the Contract Law, it should be included in the lessor’s “reasonable profits”。

certainly，in practice，There will also be a crossover situation，That is, the service fees, etc. stipulated in the financial lease contract (that is, other expenses incurred during the purchase process)

cost

) may be higher than what actually occurs during the purchase of the leased property，Then according to the above analysis of rent composition，Actual service fees and other amounts incurred belong to "financing costs"，Anything above that is part of the lessor’s “profit”。

also，In litigation over financial lease contract disputes，Lessees often rely on the provisions of "Accounting Standards for Business Enterprises No. 21 - Leases"，think service charge、handling fee、Accounts payable such as management fees are not specified in the Code，Therefore, the lessee often defends that the lessor has no legal basis for charging such service fees and other payments.。The author believes that the lessee’s defense is untenable.。

first，According to Article 52 of the Contract Law

1. payment、"The Supreme People's Court's Notice on the Application of<中华人民共和国合同法>Explanations on some issues
2. 》Provisions of Articles 4 and 14，One of the things that vetoes the validity of a contract is the law、Mandatory provisions on the effectiveness of administrative regulations，As a departmental regulation promulgated by the Ministry of Finance, the "Accounting Standards for Business Enterprises" cannot deny the validity of the contract.。

Secondly，Judging from the expressions in Article 243 of the Contract Law，Determination of “rent” allows party autonomy，Service fees agreed in the contract、handling fee、Payments such as management fees do not violate the law、Mandatory provisions of administrative regulations。

again，According to the provisions of Article 1 of the "Accounting Standards for Business Enterprises - Basic Standards"，The purpose of the "Accounting Standards for Business Enterprises" is "to standardize the accounting confirmation of enterprises、Measuring and reporting activities，Ensure the quality of accounting information”，That is to say, the "Accounting Standards for Business Enterprises" regulate the financial accounting of enterprises.，Does not have the effect of binding a contract。

at last，Service fees receivable from lessor、handling fee、Management fees, etc.，According to the provisions of Article 18 of "Accounting Standards for Business Enterprises No. 21"，Reflecting “unrealized financing gains” in the lessor’s accounting treatment。

five、Conclusion: The above analysis，The rent in a finance lease should be determined based on the lessor’s “financing costs” and “reasonable profits”，Service fees agreed in the contract、handling fee、Management fees and other amounts can be classified into "financing costs" or "reasonable profits" depending on their nature.，Comply with the provisions of Article 243 of the Contract Law。

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