On the Attribution of Effects and Liability for Acts of Ultra vires Representation——Centred on Article 20 of the Judicial Interpretation[2023]No.13
Article 20 of the judicial Interpretation[2023]No.13 takes the"limitation of representation"as the ba-sis of interpretation,and provides a typology of rules for adjudicating acts of ultra vires representation.The objective criterion of the obligation of reasonable examination by the counterparty has been introduced for acts exceeding the statutory limitations on the right of representation.The content of reasonable examination by the counterparty includes both a lawful review of the formal elements of the authorisation and a logical re-view of the appropriateness of the content of the authorisation.If the counterparty fails to fulfill the obligation of reasonable examination,the legal effect of the contract of ultra vires representation is not attributed to the legal person.However,the contract is not ipso facto null and void,but its validity is pending.The contract becomes effective only after the legal person recognizes it.If not,the legal effects of the contract are not at-tributable to the legal person.The legal person escapes from being a party to the contract and is not liable un-der the contract.If the legal person is indeed at fault for the infringement,Article 157 of the Civil Law shall not be applied,but rather article 1165 of the Civil Law.In principle,the provisions of Article 61(3)of the Civil Law shall be applied to acts that exceed the agreed limitations on the right of representation,and the le-gal effect of the contract shall be attributed to the legal person,unless the legal person can prove that the counterparty did not enter into the contract of ultra vires representation in good faith.However,whether the legal person is liable for breach of contract is to be determined on the basis of the attribution of effect and judgement of validity,taking into account the circumstances of the breach.If the counterparty is not in good faith,the rules of the Civil Law,Article 171,on unauthorised agency shall be applied by analogy to deter-mine the fault and responsibility of each subject.
Acts of ultra vires RepresentationUltra vires GuaranteeAttribution of EffectsEffec-tiveness of Acts
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