Research On Judicial Practice About Apparent Agency

The essence of apparent agency is to ask the principal who doesn't have the expression of intention to bear the legal effects of the acts caused by the unauthorized agent by the compulsive legal regulations. The establishment of apparent agency is a breakthrough of the principle of autonomy of private law. This paper holds that the legislation of the apparent agency regime is to balance the autonomy of private law and the safety of transaction, and the core of this regime is to find out the most proper equilibrium point. Through the analysis of the current legislation, and the two most important sources of the agency regime, the General Principles of Civil Law and the Contract Law, we can find out the General Principles of Civil Law and its judicial interpretations only stipulated the unauthorized agency in narrow sense but they didn't adopt the concepts of unauthorized agent in a broad sense. From this point of view, the General Principles of Civil Law and the Contract Law are not contrary to each other. The provisions of the Contract Law are the supplement of the General Principles of Civil Law and make the latter clearer. Thus, in the legal practice area, the Contract Law is the main source to the issue of apparent agency. Besides, the Marriage Law, the Partnership Law and the Corporation Law made special regulations respectively related to the issues of apparent agency. Mostly, they supplement the Contract Law and make detailed provisions on how to apply the standards stipulated in the Contract Law.For the problems existed on the practice about the apparent agency, I will cite two cases whose facts are basically the same but the legal conclusion are poles apart. Through inductive analysis of these cases, I reckon that the problems existing are caused by the apprehending and applications of the law. The essential disputes lie in the uncertainty of the apparent agency and the standards of the reasonable reliance and the disunity of the principal's fault and the goodwill of the third party. The law and the related judicial interpretations didn't give a clear answer to those problems existed in practice.Before the analysis of the above problems and putting forward opinions, at first this paper will express the recognized jurisprudence basis of the apparent agency: 1) counterpart's reasonable reliance, namely the counterpart can achieve his purposes after he fulfilled the necessary prudence obligations and give reliance to others, and he can further be guaranteed the safety of his acts; 2) the theory of the apparent liability of the principal's rights, namely if the principal has faults over the appearance of the illusive rights, he should bear the liability for the counterpart who believed the illusive rights; 3) the theory of risk control, according to this theory, it accords with the equity principle by distributing the risk to those who can control the risks. Therefore, in the civil juristic acts, the civil parties who can control risks should bear the obligations to avoid the occurrence of risks.Based on the above jurisprudence basis and to the current problems in practice, this paper expressed the following questions respectively: 1) the counterpart has reasons to believe that the actor has the power of agency; 2) whether the principal's fault should be one of the qualifications for the apparent agency; 3) the counterpart's prudence obligations.For what kind of reasons the counterpart should have to form the apparent agency, this paper puts forward the concept of'agency appearance'and gives the standards of this concept. The counterpart can prove the agency appearance suffices the reliance by clarifying the following situations: 1) the apparent power entrusted by the principal lets the third party has enough reason to believe the actor has the power of agency; 2) the unauthorized agent has credentials which made the counterpart has reasons to believe; 3) under some special transactions, the counterpart has reasons to believe the actor has the power of agency; 4) the particular identity relationships, such as the partnership, counsellorship, parents and children, husbands and wives, etc. which can produce special reliance.For the standards of'reasonable'in the term of the'reasonable reliance', I will combine it with the prudence obligation of the counterpart, and combine counterpart's prudence obligation with reasonable reliance. The general rules are as follows: if the counterpart has higher prudence obligation, the reasonable reliance would be difficult to be accorded, vice versa, the apparent agency would be easier to be accorded. However, it is impossible to judge whether the counterpart fulfilled the prudence obligation. We'd better try it in a reversed way, that is to say, if we can observe that the actor has faults, such as he didn't make investigation while he should, or he wasn't prudent when he should but relied it blindly, then he cannot be sorted to the reasonable reliance. I think to judge the counterpart's prudence obligation; we should combine lots of factors, such as, transaction customs, the format of the appearance of the power of agency, the location of the transaction, the nature of the transaction, and the amount of the transaction.For whether the principal's faults should be the one of the qualifications, some people are affirmative while others are negative. In my opinion, based on the theory of apparent power of agency, I think neither the affirmative way nor negative way can be applied to all the situations of the apparent agency. But we should balance the protection of the principal's interests and the counterpart's reliance, distinguish the types of the agency, judge the effects of the principal's faults to the appearance of the power of the agent, and determine whether the principal's faults can form apparent agency. According to whether there is identity or subjection relationship, this paper will divide the apparent agency into the entrusted agency in general, the agency with identity relationship, and the agency with subjection relationship. And I will analyze how the principal's faults will be effective in each of these different types of agencies.Besides the discussion of the substantial elements of the apparent agency, this paper will consider the disorder in the procedures of the legal practice, and discuss the related issues about the procedures in the agent lawsuits. The problems about the procedures are: 1) add parties; 2) the distribution of the burden of proof.For the parties, this paper thinks the counterpart has the right to choose in the lawsuits of agency. The litigation petition can ask the principal to fulfill the contract; also he can ask the actor to bear the liability. If he choose the latter way, it is not necessary to add parties because there is nothing to do with the nominal principal. But if he choose the former way, the principal is the defendant, how to fix on the actor's status in the lawsuits? There are two opinions: one is make the actor as a joint defendant; while the other one is to make the actor as the third party without independent claiming rights. In my opinion, the actor should be the third party which would accord with the theories of procedure law and the efficiency of the court.For the distribution of the burden of proof, the judgments may be different if the judge distributes the disadvantage to the party who bear the burden of proof when the core facts are difficult to prove. In China, the legislation adopts the theory of the classifying of the essential elements, that is to say, before putting forward the principles of the burden of proof, we should classify the essential elements of the facts, and then decide which party should bear the burden of proof and the party who bears the burden should assume the disadvantages if the core facts cannot be proved. According to the essential elements of the apparent agency, I think there are several types as below: 1) the plaintiff who claims the apparent agency bear the burden of proof; 2) the counterpart bear the burden when there are apparent power of agency and the principal has faults; 3) if the principal denies, the principal has the obligation to put forward the proof. But for the standards, the principal only needs to confront the counterpart and make the facts cannot be proved, and then the counterpart still should assume the disadvantages; 4) the principal's demurrer, which means that the principal should prove that the counterpart has the facts of malice. If not, the law still thinks the counterpart is in goodwill.