Factoring agreement - instrument for credit institutions

• Author: Cristina Marilena Paraschiv
• Position: University of Bucharest, Bucharest - Romania
• Pages: 138-142

AGORA International Journal of Juridical Sciences, www.juridicalj ournal.univagora.ro

ISSN 1843-570X, E-ISSN 2067-7677

No. 4 (2013), pp. 138-142

138

FACTORING AGREEMENT – INSTRUMENT FOR CREDIT

INSTITUTIONS

C. M. Paraschiv

Cristina Marilena Paraschiv

Faculty of Administration and Business, Department of Economics and Administrative

Sciences, University of Bucharest, Bucharest, Romania

*Correspondence: University of Bucharest, no. 4-12, Regina Elisabeta Blv., sector 1,

Bucharest, Romania

E-mail: av_cristina.paraschiv@yahoo.com

Abstract

The Factoring agreement as operational instrument of credit institutions is of special

importance due to its permanent applicability, with the effect of streamlining the commercial

activities, both at national and international level. This contract represents a financial

technique closely related to the banking sector, and it can be considered as a variety of the

bank credit.

Key words: factoring, banking practice, contract, adherent, cession;

Introduction

Taking into consideration more than succinct regulation regarding the factoring

contract at the national level, it is still considered an unnamed contract

1

. Within the

Romanian legislation the factoring agreement was first mentioned by GEO no. 10/1997 on

decreasing financial blockage and losses in the economy

2

, for subsequently to be regulated

by Law no. 469/2002, currently abrogated.. Internationally the factoring agreement is

regulated by UNIDROIT Convention on International Factoring agreement from Ottawa in

1988, the Rome Convention of 1980 on the law applicable to contractual obligations as well

as the United Nations Convention in New York in 2001 on the assignment of receivables in

international trade.

The concept, the legal nature and the parties of factoring agreement

The concept of factoring has its origins in the 17

th

century, in the Anglo-Saxon Law,

and it played a significant role in the development of international trade, at the time of its

appearance being concentrated in the textile trade between England and the United States.

In French doctrine

3

factoring is considered a technique by means of which a customer

called adherent or supplier submits his receivables to a factoring company called factor which

is a credit institution subject to the rules of Monetary and Financial Code. In return for

remuneration, the factor undertakes to collect the adherent’s receivables from its debtors and

to pay in advance, in whole or in part, the receivables transferred, ensuring the enforcement of

receivables even if the debtor cannot pay.

Within the Romanian legislation the factoring agreement was defined as that

“agreement concluded between a party called adherent, supplying goods or providing

services, and a banking company or specialized financial institution, called factor, by means

1

Brândua Vartolomei, Contractul de factoring, Lumina Lex Publishi ng House, Bucharest, 2006, p. 40-41.

2

Official Gazette of Romania. no. 72/22.04.1997, abrogated by art. 13 of Law no. 469/2 002, in its turn

abrogated by Law no. 246/2009 published in the Official Gazette o f Romania no. 450/30.06.2009.

3

Lavinia Smarandache, Alina Dodocioiu, Consideraii privind contractul de factoring, Revista de tiine juridice

Publishing House, no. 4/2008, p. 98 apud T. Bonneau, Droit bancaire, Montchrestien, P aris, 2003, p. 373.