Judgment Of Effectiveness And Liability Of The Company In Ultra Vires Guarantee

Although The Minutes of the National Court Civil and Commercial Trial Work(hereinafter referred to as the"Meeting Minutes")unified the judging ideas for the company’s external guarantee contracts,there are still some problems in its application.Firstly,Article 17 of the "Meeting Minutes" ignores the fact that there are employees of companies other than the legal representatives signing guarantee contracts on behalf of the company;secondly,the conclusion that the contract is invalid when the counterparty is not in good faith is still open to question;thirdly,the"Meeting Minutes" also stipulates the liability of ultra vires Civil is judged according to the Guarantee Law,but there are differences in the content of "fault" and the way of assuming liability for compensation.The first chapter demonstrates two things:"the legal representative in the company’s guarantees for others is the intended agent"and "the resolution has the dual attributes",the issue of the effectiveness of the guarantee contract is therefore redirected to the issue of whether the company’s resolution can be effective for third parties.The second chapter puts forward the path for the external effect of the resolution.Since the person signing the guarantee contract is the company’s intended agent,there are only two situations in which the resolution is effective to third parties:one is that the resolution as the basic act can affect the existence of the agency rights;the second one is that the resolution as the company’s expression of intent has direct impact on the agency act.The act of granting agency right has the character of the limited abstract.that is,if the act of granting agency right is only done to the agent,then it has the same effect with the basic behavior;if the counterparty has been informed of the granting,the granting is of non-causative nature,the agency will not be affected.That is to say,when the resolution is not known by the counterparty,the defective resolution will have the effect of eliminating agency rights.At this time,the effectiveness of the guarantee contract should be regulated by the unauthorised agency.When the outersiders are informed of the agency,the act of granting the agency right is uncaused,and the agency right will not be eliminated.The company can revoke the guarantee contract by claiming the substantial misunderstanding.Chapters 3 to 4 explored the basis for creditors to claim loss from companies when the ultra vires guarantee is invalid.When there has the external act of granting,the agent has agency right.After the company claims the substantial misunderstanding,it need to compensate for the loss of reliance interests.It is possible to establish an unauthorised agency only with the internal authorization,and then form an ultra vires guarantee.Article 17 of the "Interpretation of the Supreme Court of the Application of the Relevant Guarantee System of the Civil Code of the People’s republic of China "(hereinafter referred to as "Interpretation of the Guarantee System of the Civil Code")only involves the issue of liability when the guarantee contract between two people is invalid.However,there is a tripartite relationship in the company’s guarantee for others.while Article 171 of the Civil Code do not involve the responsibilities of the principal.The ultra vires guarantee violates the agent’s legal obligation,leading to statutory liability,which is special negligence in contracting.At the same time,if the ultra vires guarantor commits an active fraud,it constitutes a violation of the general protection obligation,and incurs tort liability and statutory liability.According to Article 167 of the Civil Code,if a company knows or should know that the agency is illegal and has not expressed opposition,it constitutes the so-called "guarantor’s fault" in Article 17 of the "Interpretation of the Guarantee System of the Civil Code".The guarantor shall be jointly liable,but may recover the part that it should borne by the agent.The company not only has to bear responsibility for its own fault,but also may have to assume substitute liability for the ultra vires guarantor:the ultra vires guarantor plays two roles.When the ultra vires guarantor has performed tortious acts,Article 1191 of the Civil Code can be used to sue the company;when an ultra vires guarantee does not constitute a tort,the ultra vires guarantor shall bear special statutory responsibilities,and a non-fault company shall also assume the substitute liability.At this time,it is necessary to apply the Article 523 of the Civil Code by analogy.