Research On The Effectiveness Of The Company’s External Guarantee Contract

For a long time, the effectiveness of the company’s external guarantee contract has been controversial in academic and practice. Theorists have varied views on this issue. Many scholars focus on the nature of the Article 16 of the Company Law of the People’s Republic of China (hereinafter referred to as Company Law). However, in fact the legislative intention of Article 16 is to make procedural limitations on the formation of company’s intention. The Article 16 is formulated to adjust the relationship between the members of the company. Therefore, this code cannot be used as the basis for the identification of the effectiveness of the company’s external guarantee contract. A lot of scholars and judges believe that the nature of Article 16 is a penalty rule. Therefore, the company’s external guarantee contract is valid if companies violate Article 16.People identifying the effectiveness of the company’s external guarantee contract should be based on the Article 50 of the Contract Law of the People’s Republic of China and Article 11 of the Judicial Interpretation of Guarantee Law. The effectiveness of the company’s external guarantee contract is depended on the creditor’s’good faith’. There are controversial views on the identification of’good faith’. The core argument on’good faith’ is whether creditors are under obligation of review.Whether the creditor has obligation of review or not needs to be analyzed according to specific circumstances. The decisive factors are the identity of creditors and different transaction backgrounds. If the creditor is commercial bank, then it has to take the obligation of review. If the creditor is not commercial bank but other legal entities, then it has not to take this responsibility.