CHAPTER 14 CONTRACTS FOR FINANCIAL LEASE

Article 237 A financial lease contract refers to a contract whereby the lessor buys the leased property from the seller based on the lessee's choice of the seller and the leased property, and supplies it to the lessee for the latter's use, and the lessee pays the rent.

Article 238 The contents of a financial lease contract shall contain such clauses as the title, quantity, specifications, technical performance and inspection methods of the leased property, the term of the lease, the rent composition and the time limit and kinds of currencies for payment of the rent, and the attribution of the leased property at the expiry of the lease term.

A financial lease contract shall be in written form.

Article 239 With regard to the sales contract concluded by the lessor based on the lessees' choice of the seller and the leased property, the seller shall deliver the object to the lessee according to the terms of the contract, and the lessee shall enjoy the rights of a buyer relating to the received object.

Article 240 The lessor, seller and lessee may agree that, where the sellor fails to perform the sales contract, the lessee shall exercise the right to claims. Where the lessee exercises the right, the lessor shall provide assistance.

Article 241 The sales contract concluded by the lessor based on the lessee's choice of the seller and the leased property, shall not be modified in respect of the contents of the contract relating to the lessee without the consent of the lessee.

Article 242 The lessor shall be entitled to the ownership of the leased property. In case of bankruptcy of the lessee, the leased property does not belong to the bankrupt property.

Article 243 The rent under a financial lease contract shall be determined according to the major part or whole of the cost for purchasing the leased property and reasonable profits of the lessor, except as otherwise agreed upon by the parties.

Article 244 Where the leased property does not conform to the terms of the contract or the purpose of its use, the lessor shall not bear any liability, except that the lessee decides on the choice of the leased property depending on the skills of the lessor or the lessor interferes with the choice of the leased property.

Article 245 The lessor shall insure the lessee's possession and use of the leased property.

Article 246 Where the leased property causes personal injury or property damage to a third party during the period wherein the lessee possesses the leased property, the lessor does not bear liability.

Article 247 The lessee shall keep the leased property in a proper storage and use it properly.

The lessee shall perform the obligation for maintenance of the leased property during the period wherein the lessee possesses the leased property.

Article 248 The lessee shall pay the rent according to the terms of the contract. If the lessee still does not pay the rent within a reasonable time limit after being urged, the lessor may request it to pay all the rent, or rescind the contract and take back the leased property.

Article 249 Where the parties agree in the contract that the leased property shall belong to the lessee at the expiry of the lease term, the lessee has paid the majority of the rent but is unable to pay the remaining rent, and the lessor rescinds the contract for this reason and takes back the leased property, the lessee may request the lessor to return a certain part if the value of the leased property taken back exceeds the rent and other expenses which the lessee owes to the lessor.

Article 250 The lessor and lessee may agree upon the attribution of the leased property at the expiry of the lease term. Where there is no agreement in the contract as to the attribution of the leased property or such agreement is unclear, nor can it be determined according to the provisions of Article 61 of this Law, the ownership of the leased property shall belong to the lessor.