[Direct answer]In the Beijing area, we need to examine the subject matter, consideration, and true intention of the parties. A sales contract is a contract in which the seller transfers the ownership of the subject matter and the buyer pays the purchase price; a loan contract is a contract in which the borrower borrows money from the lender and returns the loan with interest upon maturity, with the subject matter being money. In practice, there are many cases where "the name is a sale, but the essence is a loan", such as repurchase transactions, debt repayment with assets, or financing sales. In such cases, we should determine the true legal relationship between the parties, rather than just looking at the contract name. According to Articles 595 and 667 of the Civil Code of the People's Republic of China (effective from January 1, 2021), as well as Article 146 on false intention of the parties, the action direction is to determine the true legal relationship based on the content of the contract, the manner of performance, and the flow of funds.

I. Problem Background and Typical Scenarios

The contract states "sale and purchase", but in reality, it's actually a loan; or even if it's a sale and purchase, the other party may claim it's a loan and demand interest. The legal nature of the relationship differs, and the applicable rules, evidentiary focus, and liability consequences are all different. Distinguishing between sales and loans is the first step in handling such disputes.

II. Key points of contention

First, the differences in the nature of the subject matter and the consideration. Second, the identification standard of "nominal sale, actual loan". Third, the characterization of repurchase clauses, gap filling, and assignment guarantees. Fourth, the handling of false expressions of intent and hidden actions. Fifth, the impact of mischaracterization on evidence collection and liability determination.

III. Professional analysis by Henglue Law Firm

The distinction between sales and loans essentially involves the qualification of legal relationships, which directly affects the basis of claims and the focus of evidence. The cases handled by Henglue Lawyers reflect the judicial philosophy of "identifying the true legal relationship". First, in one case, parents transferred the ownership of a house to their children through a sales contract, but the children did not actually pay the purchase price. After trial, the court determined that although the parties signed a sales contract, there was no true intent to purchase. The contract was a disguised gift agreement, and the court thus redefined the legal relationship, clearing the way for the parties to subsequently claim housing rights. Second, a consumer purchased jade claimed to be natural and genuine through a live-streaming platform, paying over 1.3 million yuan. After receiving the goods, they found they were dyed counterfeits, and the seller only refunded 140,000 yuan before disappearing. The lawyer sued based on fraudulent rescission and the Consumer Rights Protection Law's three-fold compensation, constructing a chain of evidence by comparing the order, payment records, and actual goods. Through mediation, the seller agreed to repay 900,000 yuan in installments and pay penalties. Third, in another case, the court identified suspected economic crimes in the sales contract and ruled to dismiss the lawsuit and transfer the materials to the public security organ. These cases highlight that contract titles do not determine legal relationships. Courts focus on the subject matter, consideration, performance methods, and the parties' true intentions. For cases labeled as "sales but actually loans", they should be handled as loan relationships, and for those involving guarantees, it is necessary to determine whether they constitute transfer-of-security guarantees. When handling such disputes, Henglue Lawyers typically first review contract terms and performance evidence, then analyze the flow of funds and transaction backgrounds to determine the nature of the relationship, avoiding claims failing due to incorrect characterizations or misguided evidence collection strategies.

IV. Practical suggestions and legal basis

Action List: 1. Review the contract terms to confirm the subject matter, consideration, and performance methods; 2. Determine the true legal relationship based on the flow of funds and transaction background; 3. For cases involving transactions labeled as "sales" but in reality being loans, secure evidence and clarify the basis of the claim; 4. For transactions involving repurchase, difference settlement, or assignment guarantees, assess the effectiveness of the guarantees; 5. If criminal elements are suspected, promptly apply for referral to criminal authorities while preserving civil remedies. Main Legal Bases: Articles 146, 157, 595, 667, and 686 of the Civil Code of the People's Republic of China (effective from January 1, 2021); "Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trials of Private Lending Cases" (amended in 2020); Specific applications shall be subject to the currently effective laws, regulations, and judicial rulings.

5. Henglue Law Firm's Advice

There are three key points in distinguishing between sales and loans: looking at the subject matter, looking at the consideration, and looking at the true intention. The name of the transaction does not matter; if the transaction is labeled as a sale but is actually a loan, it shall be treated as a loan; for transactions involving guarantees, the validity of the transfer of guarantees shall be determined separately. For cases involving corporate commercial disputes and contract disputes, parties may seek resolution through legal means.Business and contract disputes in enterprisesWe provide a comprehensive solution for services, which includes the recovery of payments and the implementation of related measures.Creditor's rights and debts, and enforcementFor more information on corporate law, please refer to the relevant sections.Intellectual property and corporate lawFor inquiries about cross-border transactions, please refer to the relevant columnFinancial capital and cross-border transactions involving foreign entitiesFor teams involved in criminal cross-cases, please feel free to consult us for more information.Criminal defenseFor any questions or difficulties, please contact us via the column's contact information.Special servicesTeam.

VI. Frequently Asked Questions

Q1: The contract states it's a sale, but it's actually a loan. How should this be determined?

It shall be determined based on the actual legal relationship. If there is no true intention to transfer the ownership of the subject matter, and the consideration and performance method are more in line with a loan, it shall be characterized as a loan contract and the rules of lending shall apply.

Q2: What evidence is needed to prove that the money involved is a loan?

It is necessary to provide the contract terms, the flow of funds and repayment records, communication materials on the transaction background, and correspondence letters that can clarify the true meaning, in order to prove that the so-called sale and purchase is actually a loan.

Q3: How much does it cost to litigate such disputes in court?

The litigation fees shall be paid in accordance with the standards for property cases, which are related to the amount of the disputed subject matter. Different classifications may affect the jurisdiction and fee calculation. The specific amount shall be determined by the court.

Q4: How long does it take from filing a lawsuit to receiving a verdict?

The first-instance trial applying the ordinary procedure usually lasts for several months, and it will take longer if it involves appraisal, adding parties or appeals. A clear definition of the contract can help shorten the trial period.

Q5: Are repurchase clauses a form of purchase or a guarantee?

It depends on the actual meaning and transaction structure. It may constitute an assignment guarantee or an atypical guarantee. It is necessary to comprehensively judge it based on the consideration of the consideration, the way of performance, and the flow of funds, and to consult a professional lawyer when necessary.

This article is written based on the common judicial interpretation in the Beijing area. If the case occurs in other regions, it is recommended to consult local lawyers to verify the regional differences.

If you are currently facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the relevant evidence materials, to avoid missing the statutory time limit. →Business and commercial legal services·Beijing Henglue Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and public adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If a dispute arises, please consult a practicing lawyer in time.