ABSTRACT
The Chinese Civil Code distinguishes between the security contract and the property right of security. Where a security contract is established validly but no security right is created, the performance of this contract may lead to partial or prejudiced performance that might violate the rationale of pari passu, particularly in the situation where the contract is performed mala fide. The partial performance damages the interests of other creditors. The partial performance of the security contract is based on the parties’ agreement on priority and the judicial execution of the contract. Partial performance may arise in the performance of a preliminary contract concerning immovable property, double sales of movable property, and ex-post performance of a charge contract under which registration was not finished. Two principal remedies are available where the debtor defaults: specific performance and monetary compensation. The partial performance is associated with the former remedy recognised as judicial performance. Specific conditions should be set up to restrict the partial performance or specific performance of the security contract to protect other creditors.
