Research On The Effectiveness Of The Ultra Vires Act Of The Legal Representative

With the implementation of the General Provisions of the Civil Law,great changes have taken place in the original artificial person system in our country,triggering a wide-ranging discussion between academics and practitioners.Article61(3)of the General Provisions of the Civil Law regulates the legal representative's ultra vires act on the basis of Article 50 of the Contract Law.In fact,both academic circles and judiciary circles have much controversy over the validity of legal representative's ultra vires act and the application of law.It is worth exploring whether the implementation of the General Provisions of the Civil Law can solve the above problems.This article consists of introduction,body and conclusion.The body part is divided into four chapters,the general content is as follows:The first chapter is a review of the status quo of the judicial practice of the legal representative's ultra vires act.This chapter introduces three typical cases,combined with the combing of related cases,summarizing three kinds of attitude to the validity of legal representative's ultra vires act in judicial practice,effective,invalid and pending.And various courts give different reasons on how to affirm the validity of the act.The second chapter mainly defines the legal representative's ultra vires act.Thischapter focuses on the definition of legal representative's authority,the demarcation of ultra vires act and the application of the existing law.First,although the legal representative is established based on the law,its content is obviously different from that of the accredited representative.The law only stipulates the scope of the legal representative's position.For the generation,identity and authority of the representative,the bylaws can stipulate,reflecting the autonomy of will and indicating the non-official attribute of the legal representative.The essence of the legal representative is actually closer to the entrusted agent.Second,the scope of the authority of the legal representative is not the same as the scope of the enforcement of the domestic business.In theory,the legal representative can deal with all business affairs on behalf of the artificial person.However,the law,bylaws and organ of power of the artificial person may limit the scope of the authority of the legal representative.Third,the law applicable to affirm the effectiveness of the ultra vires act should give priority to the provisions of the General Provisions of the Civil Law on the basis of the rule that "the new law is superior to the old one".For the Contract Law,which part makes special provisions and does not conflict with the General Provisions of the Civil Law,should continue to apply before the contract or the debt code being made.The third chapter mainly discusses the type of validity of legal representative's ultra vires act.In common law system,a director is regarded as an agent of the company.Therefore,when a director exceeds the company's authority and signs a contract with a third party,it shall apply the general principle of agency law to confirm the validity of the contract.But in continental law system,the power of the legal representative is unrestricted by principle,while allowing the bylaws to limit the authority of directors.The provisions of the agency are also used to confirm the validity of the ultra vires act of the directors who on behalf of the artificial person.At present,Chinese mainstream view holds that for the bona fide third party,the ultra vires act shall be effective,while for the malicious counterpart,there are two kinds of views,invalid and pending.However,this article argues that in the case of ultra vires,the act of legal representative is not taken as the artificial person's own act,that is to say,the personality of natural person and the personality of the artificial person are independent,both of which have a high degree of similarity.There are some countries or regions where consider the legal representative is not the agent of the artificial person apply the proxy laws to confirm the validity of ultra vires act.Therefore,the validity of the ultra vires act can be fully justified by the articles about proxy of the General Provisions of the Civil Law in our country.It is necessary to judge whether the relatives are goodwill,and the legal regulations,bylaws,and the restrictions on the authority have an impact on the determination of relatives in goodwill.First of all,if the legal representative violates the law or the administrative rules which belong to the mandatory norms of effectiveness,the ultra vires act shall be invalid.Second,the bylaws is internal document of an artificial person,which is used to restrain its members.It is an autonomy rule and therefore can only bind the internal members of an artificial person,the external person has no obligation to review.Finally,the resolution is less public than bylaws,so the relatives have no censorship obligations."Relatives of Goodwill",in Article 61(3)of the General Provisions of the Civil Law,shall not be limited to those who do not know or should not know the restrictions made by bylaws or resolutions of the artificial person authority.Those who know or should know restrictions of the authority also have room for being regarded as relatives of goodwill.The nature of artificial person,the relative professional ability,trading habits,transaction records and other comprehensive identification can be used to judge whether the relatives are goodwill.The fourth chapter mainly solves the problem of burden sharing after determining the validity of ultra vires act.When the ultra vires act effectively,the artificial person needs to be bound by the act.When the artificial person fails to perform the obligation,the relative person can then claim the liability for breaching the contract.In the interior of the artificial person,the legal representative should take the liability for violating the faithful and diligent obligations.When the ultra vires act is invalid,the artificial person is not bound by the act,the problem of responsibility sharing should be solved between the relatives and the legal representative personally.There are two ways to solve this problem.One is applying Article 171(4)of the General Provisions of the Civil Law,the ultra vires act can be defined as unauthorized agency.The second one is applying Article 157 of the General Provisions of the Civil Law,which stipulates the culpa in contrahendo,both parties take the responsibility on the basis of their own fault.