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An Analysis Of The Effectiveness Of The Company’s Legal Representative Overstep His Authority To Conclude A Contract

Posted on:2022-10-07Degree:MasterType:Thesis
Country:ChinaCandidate:Y LvFull Text:PDF
GTID:2506306518492104Subject:Law
Abstract/Summary:
The problem of the legal representative overstep his authority to conclude a contract has always been a hot topic in the theoretical and practical categories.Article 16 of Chinese "Company Law" is a procedural norm about corporate surety.In judicial practice,it is very common for the legal representative to sign a guarantee contract with the creditor in the name of the company.If the guarantee act of the legal representative is not the true intention of the company and without a resolution of the board of shareholders or administration,there is no law to deal with how to determine the validity of the guarantee contract,How to deal with the legal relationship between the legal representative and the company.By including the Interpretation approach of validity of the guarantee contract and summarizing the court’s judgment on this problem,it is known that some people think that violation of Article 16 of the "Company Law" will result in the invalidation of the guarantee contract,and some people think that the "Company Law" is Internal management regulations of the company,does not affect the validity of the guarantee contract,and the guarantee contract is valid.The "Company Law" is management regulations for allocating power and stabilizing the order of the company,but judging the validity of the legal representative overstep his authority to conclude a guarantee contract should not be limited to the company law norms.It also needs to be combined with the "Civil Code" General part and Contract part for comprehensive cognizance.Violation of the provisions of the "Company Law" will not directly lead to the invalidity of the guarantee contract,but the act of overstep authority had legal provisions.According to Article 504 of the Civil Code,the legal representative overstep his authority to conclude a guarantee contract is generally valid,but except for those who know or should know overstep authority.In the external activities of the company,China has formed an unique "legal representative" system,as the company’s external representative institution,the legal representative and the company have the same personality,the legal representative’s behavior is generally regarded as the company’s behavior,and the "single representative system" created conditions for overstep authority.The power of the legal representative comes from the provisions of the law and the company constitution,and the power is also subject to statutory restrictions.When such restrictions are made public,the legal representative no longer has the same personality as the company.The company’s guarantee is outside the scope of the legal representative’s powers and cannot be determined on its own.It requires a company resolution to specifically authorize its representation.If the legal representative provides external guarantee without the company’s resolution,an overstep authority representative is established.If the counterpart of the guarantee contract knows or should know that the legal representative is overstep authority,it is presumed that the counterpart is malicious,and the law is not clear about the legal consequence,but the agency system is more complete than the representative system.When the agent exceeds the agency power,the counterpart has reasons to believe that there is agency power,the apparent agency behavior is effective,and the reliance interests of the counterpart in good faith should be protected;otherwise,the validity of the agency behavior is determined based on the ratification of the principal.Although agency and representative have different characteristics,there is no substantial difference in essence.Through comparative law research,it is found that many countries can use agency regulations in the legal representative system.Our country can be used as a reference.Commercial rechtsschein theorie is essential to maintaining transaction security and improving transaction efficiency,and the reasonable reliance interests of counterpart in good faith should be protected.The counterpart of the guarantee contract should know that the guarantee cannot be provided only by the identity of the legal representative,and the company’s resolutions need to be reviewed to ensure that the guarantee is the true expression of the company’s intentions.The scope of the review includes the company’s resolution institution,the number of people who passed the resolution or the proportion of voting rights,the identity information of the voting personnel all comply with the law and the article of company.In addition,the counterpart should also be aware of other restrictions of article of company about guarantee.In short,the scope of the counterpart’s review should be based on the article of company.If the company’s guarantee resolution complies with the law and article of company,the counterpart can reasonably believe that the legal representative has the right of representation,and the company should bear the corresponding guarantee responsibility.
Keywords/Search Tags:Legal representative, Overstep authority to guarantee, Agency system, Rechtsschein theorie, Review obligations, Counterpart in good faith
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