What Is a Secured Party?

According to Article 2 (2) of the Guarantee Law, the guarantee methods provided for in this law are guarantee, mortgage, pledge, lien and deposit.

Guarantee method

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Guarantee means

Mortgage means that the debtor or a third party does not transfer the possession of the mortgaged property and uses the mortgaged property as security for the creditor's right. When the debtor fails to perform his debts, the creditor has the right to be compensated preferentially by discounting the mortgaged property or by auctioning or selling the property in accordance with the provisions of the guarantee law.

A lien means a contract under custody, a contract of carriage,

Deposit refers to the act of one party to pay a certain amount of money in advance to guarantee the performance of the contract. After the debtor performs its debt, the deposit shall be offset against the price or recovered. If the party paying the deposit fails to perform the contractual obligations, it is not entitled to return the deposit; if the party receiving the deposit fails to perform the contractual obligations, the deposit shall be doubled.

Among the above five guarantee methods, lien is a statutory guarantee method, that is, the creditor exercises the lien in accordance with the law, without the need for agreement between the parties. The other four kinds of guarantee methods need to be agreed between the parties and are the guarantee methods of the agreement.