I. Core Definition of Mezzanine Duty: What is "Mezzanine Liability"?

Literally, "Mezzanine" means "mezzanine floor or middle layer". Extended to the field of "liability", Mezzanine Duty refers to a liability form borne by the liability-bearing party in specific legal relations or cooperation frameworks, which is between "strict liability" (fully assuming all consequences) and "immunity/limited liability" (assuming liability only within a specific scope).

Different from traditional liability division, the core logic of mezzanine liability is not a "black-and-white" definition of rights and responsibilities, but a dynamic balance based on "obligation levels" and "degree of fault". Simply put, the subject bearing mezzanine liability does not need to bear full liability for all consequences, but nor can it be completely exempted from liability solely by "limited agreements". Its liability boundary must be determined based on the "performance level of due obligations" in specific scenarios.

For example, in commercial guarantee scenarios, a mezzanine guarantor is neither like a "general guarantor" who needs to bear full repayment liability nor like a "subordinated guarantor" who only bears liability after the repayment of priority debts. Instead, it bears liability within the level of its own commitment according to the "obligation scope" agreed in the guarantee contract; if it fails to perform the agreed warning and notification obligations, it needs to expand the proportion of liability assumption within the scope of fault.

II. Applicable Scenarios of Mezzanine Duty: In Which Fields is "Mezzanine Liability" Common?

The emergence of mezzanine liability is essentially to adapt to the demand for "refined division of rights and responsibilities" in complex scenarios. At present, it is mainly concentrated in four fields: commercial cooperation, financial transactions, organizational management, and professional services. The specific scenarios are as follows:

1. Financial Transaction Field: Mezzanine Financing and Guarantee

In mezzanine financing business, the core of the liability of mezzanine investors (such as mezzanine funds) is the "intermediate balance between return and risk": they not only enjoy priority in profit distribution over common shareholders but also need to bear higher risks than senior creditors; when the financier defaults, the mezzanine investor does not need to bear full debt repayment liability, but needs to provide supplementary support for the repayment of senior debts within the scope of their own investment amount and agreed guarantee. This liability form is a typical mezzanine liability.

In addition, in the "multi-level guarantee" scenario of supply chain finance, the upstream and downstream supporting enterprises of core enterprises, as "mezzanine guarantors", their liability is also between "core guarantors" and "general debtors", and they need to bear liability according to their own performance capacity and the obligation scope agreed in the contract.

2. Commercial Cooperation Field: Joint Operation and Outsourcing Services

In the joint operation model, if the two cooperating parties do not clearly agree on "joint and several liability", mezzanine liability may be formed: for example, Enterprise A is responsible for product R&D, and Enterprise B is responsible for marketing. The two parties agree that "each party shall bear liability for losses within the scope of its own business". However, if one party fails to perform the "necessary notification obligation" (such as Enterprise A failing to inform of product defects, leading to disputes in Enterprise B's promotion), it needs to bear supplementary liability beyond the scope of its own business within the scope of fault. This liability belongs to mezzanine liability.

In the outsourcing service scenario, the liability of the outsourcer also often presents mezzanine characteristics: the outsourcer needs to bear limited liability for the quality of its own services, but if it fails to comply with the reasonable management requirements of the entrusting party (such as failing to retain service records in accordance with regulations), leading to losses to the entrusting party, it needs to bear additional liability within the scope of fault.

3. Organizational Management Field: The Liability Boundary of Middle Managers

In the enterprise organizational structure, the liability of middle managers is a typical mezzanine liability. On the one hand, they need to be responsible to senior managers and perform the obligations of strategic implementation and team management; on the other hand, they need to assume the obligations of guidance, supervision, and protection to grass-roots employees. When a management error occurs, middle managers do not need to bear the "decision-making liability" of senior management nor the "execution liability" of grass-roots employees, but need to bear liability for "inadequate performance of their own management obligations" — for example, failing to timely stop the illegal operations of grass-roots employees, leading to enterprise losses, and needing to bear liability within the scope of supervision dereliction of duty.

4. Professional Service Field: The Due Diligence Obligation of Intermediary Institutions

The liability of professional service institutions such as lawyers, accountants, and appraisers is essentially mezzanine liability under the "due diligence obligation". Such institutions do not need to bear liability for all losses of service objects, but need to bear compensation liability for losses caused by "failure to perform due diligence obligations". For example, if an accountant fails to discover major omissions in financial statements due to negligence during the audit process, he needs to bear corresponding compensation liability to the client and third parties relying on the statements, but does not need to bear liability for the enterprise's own operating losses.

III. Core Characteristics of Mezzanine Duty: Three Key Attributes of Mezzanine Liability

Combined with the above scenarios, Mezzanine Duty mainly has the following three core characteristics, which are also the key to distinguishing it from other liability forms:

1. "Dynamic Nature" of Liability Boundaries

The boundary of mezzanine liability is not fixed, but dynamically adjusted according to the "performance level of obligations" and "degree of fault". When all agreed obligations are performed without fault, the liability scope is the smallest; when core obligations are not performed or there is gross fault, the liability scope will expand, even approaching "full liability". For example, if an intermediary institution engages in fraudulent acts of intentionally concealing facts, its liability will be upgraded from "limited liability under due diligence obligation" to "full compensation liability".

2. "Coexistence of Agreed Nature and Statutory Nature" of Obligation Basis

The emergence of mezzanine liability may be based on the contractual agreement between the two parties (such as the clear liability level in the cooperation agreement) or the direct provisions of law (such as the provisions on the supervision obligation of middle managers in the Company Law). When there is a conflict between agreement and statute, the principle of "statute priority" is usually adopted, that is, the agreed liability scope cannot be lower than the minimum obligation standard stipulated by law.

3. "Supplementary Nature" of Liability Assumption

In most cases, mezzanine liability is a "supplementary liability" — that is, the mezzanine liability party only needs to bear supplementary repayment obligations within the scope of its own liability when the main liability party cannot fully assume liability. For example, in mezzanine financing, only when the financier cannot repay the senior debt, the mezzanine investor needs to bear supplementary repayment liability as agreed.

IV. Practical Key Points of Mezzanine Duty: How to Avoid Mezzanine Liability Risks?

For subjects that need to bear or may involve mezzanine liability, clarifying the liability boundary and standardizing the performance of obligations are the core of avoiding risks. Specifically, it can be started from the following three aspects:

1. Clarify Agreed Rights and Responsibilities, and Refine the Scope of Obligations

In commercial cooperation or financial transactions, the liability level, obligation content, and exemption clauses of all parties should be clarified through written contracts. For example, a mezzanine guarantor needs to clearly define the guarantee amount, the triggering conditions for liability assumption, and exemption circumstances (such as losses caused by force majeure do not need to be borne) in the contract, so as to avoid the expansion of liability scope due to ambiguous agreements.

2. Fully Perform Obligations and Retain Evidence of Performance

The core of mezzanine liability is the "performance level of obligations", so it is necessary to strictly perform one's own obligations in accordance with agreements or legal provisions. At the same time, it is necessary to fully retain evidence of performance (such as service records, communication vouchers, acceptance documents, etc.) to avoid being deemed at fault due to "failure to prove the performance of obligations", thereby expanding the scope of liability assumption. For example, when providing services, professional service institutions should detailedly record the service process, customer feedback, and risk prompt content. These evidences will become the key basis for defining the liability boundary.

3. Pay Attention to Liability Levels and Do a Good Job in Risk Prediction

Subjects involved in mezzanine liability need to sort out their own liability levels in advance and clarify the boundary between "core obligations" and "supplementary obligations". For example, before participating in financing projects, mezzanine investors need to fully evaluate the debt-servicing capacity of the financier and the scale of senior debts, and predict the scope of supplementary liability they may bear; middle managers need to clarify the core content of the "management and supervision obligation" to avoid bearing additional liability due to ultra vires decision-making or supervision dereliction of duty. At the same time, potential risks brought by mezzanine liability can be hedged by purchasing liability insurance and setting up risk reserves.

V. Summary: The Core Value of Mezzanine Duty Lies in "Accurate Matching of Rights and Responsibilities"

The essence of Mezzanine Duty is a "refined tool" for the division of rights and responsibilities in complex scenarios. It breaks the traditional dual division model of "full liability/limited liability" and realizes the accurate balance of "liability and obligation, risk and return" through the dynamic matching of "obligation levels" and "degree of fault". Whether it is mezzanine financing in financial transactions or middle management liability in organizational management, the core value of mezzanine liability lies in "matching liability assumption with obligation performance", which not only avoids the inhibition of market vitality caused by "excessive liability pursuit" but also prevents the damage of rights and interests caused by "liability exemption".

For enterprises, investors, professional service institutions and other subjects, understanding the core logic of mezzanine liability and clarifying their own obligation boundaries and liability levels are not only the key to avoiding legal risks but also the foundation for achieving sustainable cooperation and development. In future commercial and legal practices, with the further refinement of the division of rights and responsibilities, the applicable scenarios of mezzanine liability will become more extensive, and its role in balancing the rights and interests of all parties and maintaining market order will become increasingly important.