The Case Analysis Of The Legal Representative Of The Vltra Vires Guarantee

With respect to guarantee outward, article 16 of the active “Corporation Law” stipulates the procedure and resolution authority of corporate guarantee from which legal representatives are excluded. However, article 50 of “Contract Law” sets the principle of “no restriction to the right of representation of legal representatives”, leading to ambiguous enforcement recognition of ultra vires of corporations in exercising guarantee outward. This thesis will propose the author's opinions on the dispute in this case through case analysis coupled with authentic interpretation to articles and relevant theories.Firstly, the thesis introduces the case and disputes. Included in the bulletin of the Supreme People's Court, this case reveals a series of problems facing corporations in judicial practice of guarantee outward. Through the analysis of reasons to three judgments and conclusion on court's ideas of judgment, the author finds that the court usually adopts two judgmental strategies in settling ultra vires of corporate legal representatives. Under the right of claim method and with the analysis on focus, the author points that the dispute facing the court is twofold, first lies in whether the influence of Article 16 of Corporation Law is in violation of the said guarantee contract; and second lies in the affirmation of ultra vires, the applicability of Article 50 in Contract Law as well as the judgment of counterpart kindness.Secondly, the thesis explores on the focus from a theoretical perspective and then conducts an analysis on the case. On one hand, the author makes a thorough analysis on Article 16 of Contract Law. From academic and judicial perspective, the author summarizes the existent academic opinions and practical judgment conclusions. In spite of complicated academic viewpoints and chaotic judicial judgment, and after legal interpretation to articles of law, the author comes to a conclusion that Article 16 of Corporation Law cannot act as the judicial basis on which the affirmation of guarantee contract potency is made and proceed to self-criticism on the reasoning part of the case. On the other hand, the author interprets ultra vires and confirms that in this case the legal representatives are in ultra after distinguishing between corporate behavior and individual behavior and defining the jurisdiction of legal representatives. To comprehend the saying “know or should know” in Article 50 of Contract Law, the decisive point line in the confirmation of counterpart's investigative obligation. In the author's opinion, the counterpart holds no investigative obligation to corporation's guarantee resolution in the process of establishing guarantee contract.Finally, a summary of court's judgmental conclusions and trial ideas result in a path to right judgmental strategy: on one hand, one should decide the counterpart's behavioral potency affiliation according to his subjective attitude and then estimate the potency of guarantee contract. On the other hand, one should seek for the legal principle consistency between Article 16 of Corporation Law and Article 50 of Contract Law.