What Are Preemptive Rights?

Pre-emptive right (1) has priority over other people's right to purchase a certain property (securities, land, etc.). For example, due to certain laws and regulations, the land has to be sold to the seller of the country. When the state considers that such forced land acquisition is no longer needed, the original seller has the right to purchase the land over others; ) The government has the right to purchase a property in the public interest over anyone else. For example, in order to avoid interference with the domestic market for goods with low import quotations, the customs may directly compulsorily purchase the product at the declared price without taxation. ^[1]

Pre-emptive right

The right of first refusal is to claim the property of a specific object before the other right holders.

Nature of preemptive right

Article 230 of the Contract Law and Article 92 of the Opinions of the Supreme People's Court on the Implementation of the General Principles of the Civil Law of the People's Republic of China (Trial) stipulate the priority enjoyed on the basis of common ownership and lease relations The right of purchase does not provide for the legal nature of the right of first refusal. Because judges have different personal understandings, it may easily lead to inconsistency in the application of the law.

The nature of the preemptive right has various understandings in theory, namely the property right theory, the debt right theory, the expectation right theory and the formation right theory. The author analyzes them as follows:

1. Real right theory. The theory holds that the right of first refusal belongs to the right of priority, and the right of priority is an independent type of property right, that is, another right determined outside the right to guarantee the realization of a right.

Chinese law does not have a legal definition of property rights, but from the many discussions of scholars, it can be theoretically considered that property rights include two meanings, one is the direct control of things and enjoy their benefits; the other is exclusive Absolute protection. These two points can be distinguished from other types of rights as the essential characteristics of real rights. The right of first refusal refers to the right of purchase which is better than that of a third person under the same conditions for the real estate of another person. The right of purchase can be interpreted as the right to request for sale in the usual sense, which is closer to the right of request than the right of control in essence, so the author believes that the right of first refusal is not a property right.

2. Claim theory. The theory of creditor's right holds that the preemptive right attaches to the sale and purchase relationship, and is still essentially a creditor's right. The author believes that although the right of preemption has the nature of a claim to a certain extent, it cannot be equated with a claim. Claims and claims are a blending relationship, not an equivalent concept. The relativity of the debt determines that the binding force of the debt is only generated between specific parties, and the fact that the existence of the preemptive right makes it effective not only affects the seller's right of disposition, but also for unspecified purchases that may be a third party Influence. This kind of impact on the owner's disposal power should not be a creditor's right.

3. The right to expect. The so-called right of anticipation refers to the right that may be obtained in the future, and its rights are pinned on the right that may be obtained in the future. The right of anticipation holds that the owner of the subject matter has not sold the subject matter, then the rights of the preemptive right owner have not yet been realized and are only in the state of anticipatory rights.

This view of interpreting the preemptive right as the right of anticipation avoids the essential identification of the preemptive right, and our essential identification of the right should be based on the acquired right or complete right, that is, with all the requirements to obtain the right Judge. If the parties are already exercising the preemptive right, can we still say that the preemptive right is the right of expectation?

4. Formation right or conditional formation right theory. The right of formation is the right of the right holder to change (including occur, change or eliminate) the legal relationship between himself or others in accordance with his own behavior. According to the German law, the right of first refusal can form a contract with the obligor selling the subject matter of the same conditions as the third party, without the commitment of the obligor (seller). However, this right of formation is subject to a suspension condition, and can only be exercised when the obligor sells the subject matter to a third party.

Looking back, a customary adjudication method in practice confirms that the sales contract is invalid due to infringement of the right of first refusal, and on the other hand, does not directly determine the contractual relationship between the priority person and the seller. This approach is different from the above-mentioned doctrine. We can call it the modified claim theory. While recognizing the preemptive right as a creditor's right, taking into account its impact on third parties, it gives the effect of quasi-property rights to explain why the preemptive right is better than the third party in the case of ordinary purchase Formed general claims. However, the legal and social effects of this approach are often unsatisfactory. First, the court's decision can only prevent the co-owner or the owner from selling to a third party under the same conditions, and cannot make the right of first refusal to actually obtain the Real estate ownership. The right of first refusal is considered useless. Second, due to the confrontation between the two parties in the lawsuit, it was impossible for the seller to sell the house to the preemptive right holder at a reasonable price under the condition of good faith, but it induced the two parties to deceive the preemptive right holder with a false contract.

Example: The house itself is only worth 100,000 yuan. In order to deal with the existence of the right of first refusal, the price of the subject matter of the virtual contract is 120,000 yuan. It is practically impossible to detect such false representations of collusion in a lawsuit. Therefore, it is inappropriate to interpret the preemptive right as a quasi-property right or amend the claim. Measured from the perspective of the social effects of the judgment, the author believes that it is better to use the right of formation or conditional formation, and this interpretation is also in line with the legislative purpose of the right of first refusal.

Substantial requirements for the exercise of preemptive right-equivalent conditions

The preemptive right system is a system that grants special subjects special benefits under the premise that the legitimate interests of sellers are not infringed. The protection of the seller's legitimate interests is reflected in the "equal conditions" stipulated by the law on the exercise of the right of first refusal. The law stipulates that under the same conditions, the purchaser has the right to take precedence over others, but there is no specific stipulation on "equal conditions". In trial practice, there have always been two different views. One view advocates the "absolute equality theory", that is, the first purchaser and the other purchasers have the same purchase conditions, which are regarded as the same conditions; the other view advocates the "relative equality theory," that is, the two purchase conditions Approximately equal is considered equal condition. The above viewpoints all have certain flaws. For the former, the conditions are too harsh. It is difficult to achieve today with the rapid development of the market economy. It is required that the two parties are absolutely equal to each other in terms of price, time limit, place of performance, and method of delivery. , It is also not conducive to the protection of vulnerable groups, especially the conditions provided by other buyers, such as providing certain opportunities, but the first caller cannot do so, if it is deprived of the right of the first caller, for example, if When the pre-emptive person uses an overpayment method to make up for the shortcomings of these additional conditions, it is not suitable to demand that the conditions proposed by the pre-emptive person must be completely consistent with the conditions of other buyers, otherwise the seller and the third party may be caused. In spite of malicious collusion, certain conditions are deliberately created to hinder the exercise of the right of first refusal. For the latter, it is too flexible to specifically grasp the "equal" conditions, and judges enjoy great discretion. Differing judgments are not conducive to protecting the interests of the parties or to safeguarding the dignity of the law. Buy and sell

Formal requirements for the exercise of the right of first refusal-the "exercise period"

Infringement

Pre-emptive right

The preemptive right system can indeed bring huge social benefits. But after all, the preemptive right system has touched the foundation of the private law systemthe autonomy of will and transaction security system. If its application is not strictly limited, the relationship between the seller and the third party will be in an unstable state. State, it will dampen the enthusiasm of the third party for investment, which is not conducive to social and economic development and economic order stability. Therefore, the law should make strict provisions on the scope of application and exercise conditions of the right of first refusal, and seek a balance of interests among sellers, third parties, and preemptive rights, so that it can truly play a stable social and economic order and enhance transactions. The role of efficiency and protection of vulnerable groups.

First of all, from the perspective of the object, whether it is civil law or Anglo-American law, the right of first refusal generally takes the real estate as the object. However, under current Chinese law, the right of first refusal object also extends to common movable property. Therefore, there is no need to grant priority purchase rights to the use-profit relationship of some items that are used free of charge or to movable property, either because they are used free of charge, or because the subject matter is movable property, which has a low value and is easily available in the market.

Secondly, from the perspective of the scope of application of the right of first refusal, the law should proceed from the above-mentioned value objectives and clearly define the basic legal relationship or legal facts arising from the right of first refusal.

Thirdly, the conditions for the exercise of the right of first refusal should be clearly stipulated in law, and the "equivalent conditions" and the "period of exercise" for its exercise should be clearly and operationally stipulated in law, so as to reduce the priority of exercise. Disputes arising from call rights.

Only in this way, the preemptive right system can achieve the protection of the special interests of the preemptive rights holders at the same time as the value goals of encouraging transactions and promoting transaction security, and can truly realize the legislator's pursuit of stable order, efficiency and fairness.