Research On Undisclosed Agency And Agency For An Unnamed Principal

Starting with the analysis to the definitions, origin and design of undisclosed agency in common law system and contrasting it to the rules of agency and commission agency in civil law system, the author first brings forward a new theory as to the differences of agency law between common law system and civil law system. The efforts of some international treaties to fuse the agency laws in the two law systems are also pointed out in the essay. In the following part, the author makes analysis and comparisons to the provisions of undisclosed agency and the undisclosed position of the principal in our country, which are indicated in Article 402 and 403 of our Contract Law. On the basis of the analysis made above, the author makes some suggestions as to how to understand and apply Article 402 and 403 in legal practice.In this essay, the author brings forward an opinion that the social function of agency is to establish direct transaction relationship between the agent and third parties. It is only a question of form whether the act is done in the name of the principal or not. Agency laws in civil law system is limited to the standard of "acting in the name of the principal". Contrary to civil law system, undisclosed agency and agency for an unnamed principal in common law system, through authorizing intervention rights to the principal and granting rights to choose to the third party, provided a chance to the principal to establish transaction relationships with third parties where the agent acts in his won name. Such legal system which makes it easier to realize its agency functions and to meet specific requirements of the public is much more flexible when contrasting to the corresponding system in civil law system-the commission agent. The author points out that this is the substantial difference between civil law system and common law system."Theory of differentiation" and "Theory of equality" are both theories focusing on the external and internal relationships of agency. And neither of which shows us whether agency should be performed in the name of the principal or not. It is a general and ambiguous theory to originate the differences of agency laws between civil law system and common law system to different traditions of the two law systems. In the author's opinion, the different requirements of the two systems to agency acts originate with the different requirements of them two to civil conducts. The author further concludes that the abstract theory of legal conduct which is a specific characteristic of civil law system is the shackle of agency law in civil law system.Based on the above analyses, through researching relevant provisions in international treaties and theories and practices in our country, it becomes easier to understand the worldwide trend to abandon "in the name of the principal" standard and the necessity for us to import undisclosed agency and agency for an unnamed principal.Because we have followed civil law tradition for many years, the "in the name of the principal" standard and the relativity of contracts have rooted deeply in the minds of our legislators and legal practitioners. As a result, the flexibility and applicable scope of undisclosed agency and agency for an unnamed principal as been limited strictly when our legislators adopted them in formulating Article 402 and 403 of Contract Law. Besides, the legal practitioners also adopted the above mentioned thought way.The relationships between provisions in Article 402 and 403 in Contract Law and corresponding provisions in Commission Contract is very delicate, and the key points to differentiate and apply them are to inspect whether the trustee is a broker or not and whether the trusted matter is within the business scope of a broker or not, and to abide by the principle of applying specific laws (herein refers to commission provisions) in priority of general laws (herein refers to trust provisions). The applicable conditions of Article 402 and 403 of Contract Law are opposite and are easy to determine, but it is difficult to determine whether the third party knows the agency relationship when concluding a contract. It must be pointed out that it is against the legislative purpose to confirm the fact by presumption.