Research On The Identification Of The Effectiveness Of The Company's Over-authority Guarantee Contract

With the development of economy, the guarantee system is becoming more and more important, playing an important role in the economic life. However the credit risk will arise when a company offers warrants with its particular asset and credit. If the secured debtor fails to perform its obligations, the company, as a guarantor, has to fulfill the guarantee responsibility to protect the creditors' interests and rights. In this case, the company's property may be reduced, or even dies. If the company's external guarantees is in accordance with the company's articles of association and is in agreement with all the shareholders, then, the guarantee is valid. In a circumstance that the company lacks decision-making process, or violates the company's articles of associations, how to define the effect of the guarantee contract will be in suspense.By comprehensive interpretation of article 16 of the Company Law, it helps people understand how the effect of guarantee contract is defined when guarantee exceeds the company's authority. With reference to the Supreme Court guiding cases, this paper is divided into five parts, which study the question how to define the effect of the ultra vires guarantee contracts.The first part elaborates the external guarantee theory. It starts from the general guarantee theory and deepens to the analysis of the article 16 of “Company Law” step by step, analyzing its significance, external effect of the articles of association and the third party obligations, and then it interprets the legislative purpose of the article 16 and comments out its direct objectives and implementations.The second part discusses the effect judgment of unauthorized guarantee contract. It mainly analyses the changing status and the propensity to the secured creditor of the Company Law which acts as the basis of judgment. And then its rationality and shortcomings are pointed out further.The third part concludes the effective experiences through analyzing and summarizing related ultra vires theory and practices of the overseas “Company Law”, which provides good reference for our company about the effect judgment of ultra vires guarantee contract.The fourth part firstly introduces the interest measurement method from the two perspectives: balancing interests of the related parties and institutional interests' measurement. Secondly, considering the risks, returns and the third party's interests, it also analyzes the “examine obligation” of the relative party. Thus, the validity judgment method for existed Ultra vires guarantee contract is corrected from the two aspects above.The fifth part discusses the legitimacy of the subject obligations and supplements the Article 16 comprehensively and effectively by legal loophole filling and analogical application. In addition, it enriches the consequence elements and leads into the theory of unauthorized agency, which is combined with the judicial practice to define the validity of the Ultra vires guarantee contract, and to explore the optimum operation way for the validity judgment.