ABSTRACT
Atypical secured transactions are a field where functionalism and formalism are mutually coordinated in terms of the application of rules. The security function performed by reservation of ownership is integrated into the entirety of the transaction, and the functionalisation of this transaction requires legal concepts and rules to be reconstructed. Functionalisation is subject not only to certain conditions but also to consistency in the value standpoint, which brings difficulties in coordinating the two approaches and uncertainty in the reconstruction. When the Chinese Civil Code provides no explicit rules, the way of interpretation is uncertain, and the People's Supreme Court Security Interpretation ultimately chooses full functionalisation. However, the relevant rules in the Security Interpretation are patchy, failing to coordinate completely the two approaches in the judicial application. As a result, the People's Supreme Court Security Interpretation determines the specific method of functionalisation but triggers a problem of systematic incoherence and conflicts.
