On The Composition Of The Agency By Estoppel

By virtue of doctrines in the Civil Law and Common Law, this essay discusses the constitution of agency by estoppel in Chinese statutes to improve its application in judicial practice. The preface makes a review on why the agency by estoppeL is introduced by law and points out that this concept is rather new in China since it is recently included in the Contract Law. So we need to take advantages of the more mature principles and practices in the Civil law and Common Law with regard to this concept. The constitution of agency by estoppel is obviously a very important part, which is investigated in the following six chapters. Chapter One discusses the capacity to act as principal and agent. As a general rule, the capacity to contract or do any other act by means of an agent is coextensive with the capacity of the principal himself to make the contract or do the act which the agent is authorized to make or do. However, in the Chinese system of foreign trade agency, it抯 common to see that a principal of no contractual power authorizes a capable agent to contract with foreign companies. So for this particular system, an agency should not be invalidated simply because of the principal抯 incapacity. Since the agent is a mere instrument and that it is the principal who bears the risk of inadequate representation, an agent is not required to be relatively capable to make the contract or do the act authorized by the principal. Yet, statutes sometimes require certain qualifications in persons who act as agents. When this is so, the statutes will invalidate the acts done by persons who act without such qualifications. In Chapter Two, we insist that it should not, for an agency, matter whether the principal is named to, or even identifiable by, the third party so long as the third party realizes that there is a principal involved and does not at the time of the transaction in question think that he is dealing with the agent alone. This opinion is accepted by Chinese 絥tract law. As a result, we can not invalidate an agency or agency by estoppel owing to the fact that the principal is not named. Chapter Three deals with the relationship between the principal and agent in an agency by estoppel. As Chinese contract law stipulates, the principal is bound as against a third party by the acts of the agent within the authority the agent appears to have even though: (1) the principal has not in fact given the agent such authority, (2) the principal has limited the authority by instructions not made known to the third party, (3)or the actu~l authority is terminated without notice of the termination to the third party. Chapter Four proposes that the principal be bound as against a third party by the acts done by the agent in case the acts are linked to the principal. Otherwise, he is not liable for the acts. The doctrine is more reasonable than those which require, or not require, errors or misconduct attributable to the principal. Chapter Five investigates the cases in which a representation is so made by a principle that the agent appears to be authorized to do the acts, for which the principal is liable. (1) It is usually said that a representation made by the agent himself can not create an authority for which the principal is liable unless the principal can be regarded as having in some way instigated or permitted it. (2)The representation might be made to a particular person, or a number of persons, who is (are) intended by the principal to be on the faith of it other than others. (3)The representati...