The Judge Criteria Of Good Faith Of A Person Dealing With The Company In The Company's Officers' Ultra Vires Transactions

On the topic of how to judge a person dealing with a company is in good faith,and in order to solve the hot spots in company's ultra vires transaction which can not be explained by the existing legal provisions,this paper defines organizational thinking as the norms and principles concerning the establishment and operation of internal organization of a company that makes ultra vires transactions with a person.Similarly,this paper defines trading thinking as the norms and principles involved rights and obligations between the parties involved in company's ultra vires transaction.On this basis,this paper divides into three parts: Above of all,the balance between the organizational thinking and the trading thinking should be taken as the theoretical basis for judging the good faith.Secondly,based on the theory of the balance thinking,this paper reviews the current theory of ‘ the ultra vires standard ' : it advocates the partial improvement of ‘the ultra vires standard' and analyses the inherent defects of ‘ the ultra vires standard '.Finally,guided by the balance thinking,this paper proposes ‘the breach of fiduciary duty standard' and its system construction in order to solve the inherent defects of ‘the ultra vires standard'.The first part discusses that the judgment of good faith should be based on the balance between the organizational thinking and the trading thinking.As far as the judgment of good faith of a person dealing with a company in ultra vires transaction,the organizational thinking clarifies the reasons for particular regulation of good faith in company ' s ultra vires,and requires a person dealing with a company to undertake certain investigative obligations.The trading thinking hinders the way of judging good faith in Article 16 of the Company Law,and also provides a way to judge in accordance with trading habits.So both should be considered.Based on the experience of comparative law which can not be neglected,and the inherent requirement of balancing the value of honesty and efficiency,the organizational thinking and the trading thinking are equally important in judging the good faith of a person dealing with a company.The second part is review of the ultra vires standard under the balance thinking.Review the current theory of ‘the ultra vires standard' with the balance thinking that attaches the same importance to the organizational thinking and the trading thinking,we can see that: First,‘ the ultra vires standard ' should be compromised to clarify the scope of investigationobligation to a person dealing with a company.Second,although guided by the balance thinking,the ‘the ultra vires standard' still has the inherent defects of unclear investigative obligations of a person dealing with a company on company resolutions,and unable to make the organizational thinking work in judging good faith.The third part is the reason of introduction and construction of the breach of fiduciary duty standard under the balance thinking.Under the balance thinking,‘ the breach of fiduciary duty standard' has become an inevitable requirement to judge the good faith of a person dealing with a company in company's ultra vires transaction.Because ‘the breach of fiduciary duty standard ' can properly implement the organizational thinking.Then it can make up for the inherent defect of ‘ the ultra vires standard ',reduce obstacles to the application of‘the ultra vires standard',promote directors and managers performing duties in good faith,create an honesty and credibility trading environment and so on.A person dealing with a company has subjective motivation and objective condition to apply the breach of fiduciary duty standard,which also provides the institutional soil for introducing ‘ the breach of fiduciary duty standard'to judge the good faith of a person dealing with a company.When constructing ‘the breach of fiduciary duty standard',we should pay attention to: First,there is no need to apply it when a person dealing with a company is a professional financial institution,or when there is a reasonable doubt about the conflict of interest between the actor and the company.Second,the premise of the application of ‘ the breach of fiduciary duty standard ' is that a person dealing with a company,who has no distrust of the conflict of interest,has not fulfilled the duty of investigation.And actors representing companies are directors and managers.