Conditions for non-entry into force of mortgage contract

Legal analysis: without the approval of the competent government department, the mortgage contract of key equipment, complete sets of equipment or important buildings confirmed by state-owned enterprises is invalid; If the debtor colludes with individual creditors in bad faith and mortgages most of his property to one creditor, thus losing the ability to perform other debts, the mortgage contract is invalid.

Legal basis: Civil Code of People's Republic of China (PRC).

Article 399

The following properties shall not be mortgaged:

(1) Land ownership;

(two) the right to use collectively owned land such as homestead, private plots and private hills, except those that can be mortgaged according to law;

(3) Educational facilities, medical and health facilities and other public welfare facilities of non-profit legal persons established for the purpose of public welfare, such as schools, kindergartens and medical institutions;

(4) Property whose ownership and use right are unknown or controversial;

(5) Property that has been sealed up, detained or supervised according to law;

(6) Other properties that may not be mortgaged according to laws and administrative regulations.

Article 400

To establish a mortgage, the parties shall conclude a mortgage contract in writing.

A mortgage contract generally includes the following clauses:

(1) The type and amount of secured creditor's rights;

(2) The time limit for the debtor to perform the debt;

(3) The name and quantity of the mortgaged property;

(4) the scope of the guarantee.