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Academic Journal of Business & Management, 2022, 4(14); doi: 10.25236/AJBM.2022.041411.

The Normal-Operating Buyer’s Rule under the Interpretation Theory


Lvsifan Ge

Corresponding Author:
Lvsifan Ge

School of Law, Anhui University of Finance and Economics, Bengbu, Anhui, 233000, China


Article 404 of the Civil Code expands the scope of application of the normal operating buyer rule from floating mortgage to movable property mortgage, which has the legitimacy to promote the benign development of commercial transactions, protect reasonable trust, and take into account the interests of all parties. This rule applies preferentially to the general rule of free transfer of mortgaged property in the field of movable property mortgage, which is generally not affected by an agreement restricting or prohibiting the transfer. In order to ensure the fair application of the rules, the "normal business activities" should be interpreted in a limited manner, and the applicable conditions for "reasonable price paid" and "acquisition of mortgaged property" should be analyzed in detail, so as to avoid the indefinite expansion of the scope of application of the rules and exclude the buyer's good faith from the applicable elements. The normal-operation buyer's rule protects the buyer's ownership by blocking the recovery and effect of the mortgage right as consideration, and should give the mortgagee a remedy for the subrogation right in the price.


Normal business activities; Mortgage of movable property; Pursuit and effectiveness

Cite This Paper

Lvsifan Ge. The Normal-Operating Buyer’s Rule under the Interpretation Theory. Academic Journal of Business & Management (2022) Vol. 4, Issue 14: 65-73. https://doi.org/10.25236/AJBM.2022.041411.


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