Agency System Research

Although specific definitions have been given to Agency By Estoppel (ABE) in Article 49 in our state Contract Law, disputes on the concept and some important items (IIs) still exist in the academy. By analyzing the pros and cons of all kinds of theory, a new theory is proposed. According to the new theory, ABE refers to a law system, which includes three parts: (1) the third party (TP) has sufficient reasons to believe that people have the Authority of Agent (AOA) despite the behavior person has no AOA, (2) the corresponding civil behavior and (3) the relevant law results directly attribute to the principal. This theory is lack of AOA. However, it has all the other law characteristics and is a kind of macro non-AOA.The core problem of ABE system is the construction of IIS, which is also a critical argument between the academy and law. Based on the overview and comparison of single IIS, double IIS and multiple IIS, some conclusions have been drawn as follows,(1) The reason that the TP believe that the behavior person has AOA exists objectively. In practice, the duty, role of the behavior person, the event place, the relationship between the behavior person and the principal, and the evidence on which the behavior person depends to claim his/her AOA, should be consolidated together to judge whether Apparent Authority (AA) is committed.(2) The TP is in good faith and no faults, which means that the TP does not notice that the behavior person is lack of AOA, and this mistake cannot be treated as either carelessness or nonfeasance. As far as the mistake is concerned, Levis Culpa (LC) should be adopted, i.e., not a lata culpa or normal culpa, as long as the TP has already committed the notice duty of the manager. The significance of this method is to specify the examining and verifying duty of the relative party under the specific circumstance. By analyzing five aspects of the relative party who are capable of committing such examining and verifying behavior, it is concluded that, whether ABE is committed should be based on the judgment of whether relative party should bear the duty for further verification under the specific circumstance, not the simplecondition that relative party has AA.(3) The occurrence of non-AA behavior is relevant to the principal. Regarding the arguments on whether the fault of the person should be treated as the II of ABE. In author's opinion, at first, that the person has no faults cannot be the important composing factor of ABE, otherwise, it is very hard for ABE to be constructed. Second, that the principal must have faults cannot be the important composing factor of ABE, after all, the fault of the principal cannot cover all the cases. Third, although whether the person has faults cannot be the II of ABE, it is necessary to take into account the correlation of the formation of AA and the principal to determine the II of ABE. The so-called correlation should refer to the factors that interact between the formation of AA and the person such as behavior, identity etc. This interaction results in the belief of relative party that the behavior person has the AA. The scope of correlation is very broad. It first includes the faults or mistakes of the principal. Second, it includes the reliable belief, which is resulted by the relationship of behavior person and the principal such as partnership and affinity.As for the law result of ABE, the problem is addressed in the thesis from three aspects based on the relationship of the principal and the TP, the principal and the behavior person and, behavior person and the TP. It is concluded that, since ABE is established, the AA is effective. Accordingly, at first, the principal should take the rights and responsibilities. Then, claim the lost from the behavior person who has faults. It is emphasized that there is no rights and responsibilities in the law for the behavior person and the TP, particularly, the choice right claiming the responsibilities of the behavior person or the principal cannot be given to relative partyLastly, this paper advises that SHALL gives small scope explanation to Article 49 in Contract Law, namely, clarify the correlative important factors formed by the principal, AA, and essential good faith and no faults factors. At the same time, summarize and clarify the detailed AA of ABE, for the convenience of law operation.