Reflections on the Principal-agent System from the Interpretation of the Civil Code

In daily production and life, we can't do without various types of agency services, ranging from entrusting a third party to buy bulk commodities, to entrusting a third party to do quality inspection, to asking professionals to declare and pay taxes on their behalf, and even helping others buy lottery tickets in their lives. The agency system facilitates all kinds of transactions and life, but it also causes many disputes because of its "indirect behavior" characteristics. Therefore, Li Rui, a lawyer in midsummer, tries to interpret the principal-agent in combination with the provisions on principal-agent in the forthcoming Civil Code. 1. What is the relationship between the entrustment contract and the agency right?

when we want to cooperate with professional organizations to provide litigation agency activities, we will sign an agency contract. Principal-agent:

Actually, it is a combination of principal-agent contract and agency relationship.

an entrustment contract is a contract signed by the entrusting party and the entrusted party to bind each other's rights and obligations. The agency right comes from the entrustment contract (or oral entrustment contract), and the most direct manifestation after externalization is the certificate, such as the agent's agency certificate.

The specific case shows that the relationship between the entrustment contract and the agency is

Party A entrusts Party B to handle the tax declaration, and both parties have signed the entrustment tax declaration contract. This contract will come into effect upon signing, and it is binding on both parties. However, when Party B wants to go to the tax authorities to file tax returns, it cannot be done directly by the entrustment contract, and it needs to submit the appearance that Party B has the right to do this to the tax authorities, so Party B must file tax returns on behalf of Party A with the power of attorney ..

However, it should also be noted that the power of attorney is not always based on the entrustment contract, and the entrustment contract does not necessarily directly generate the power of attorney. Entrustment contract is not the only source of agency, and there are other circumstances that will trigger agency. For example, based on labor relations, the company authorizes employees to sign contracts with foreign countries.

second, what is the core of agency?

the core of agency is to use other people's professional skills, knowledge, time, etc. Enjoy legal consequences for yourself through the legal actions of others. Therefore, in order to produce such an effect, the actor (agent) and the principal need to satisfy that the actor (agent) carries out civil legal acts in the name of the principal within the agency authority (the acts that cannot be represented are not discussed here).

at this point, it is necessary to distinguish between explicit proxy and anonymous proxy.

Nominal agency, as mentioned in the preceding paragraph, the agent carries out specific acts in the name of the principal, and the legal consequences belong to the principal.

Anonymous agency means that an agent performs a specific act on a third party in his own name, but the agent actually performs a specific act for the benefit of the principal. Although this law is not involved in the agency clause, there are provisions on anonymous agency in articles 925 and 926.

In this regard, we can also say that the apparent agency system stipulated in the Civil Code is the basic principle, that is, when the agency occurs, the agency matters should be made public, and anonymous agency is the exception of apparent agency.

When anonymous agency occurs, the principal and the third party are given the right to choose under different circumstances, that is, if the third party does not know the relationship between the trustee and the principal, and the trustee discloses the third party to the principal when the third party fails to fulfill its obligations to the trustee, then the principal can exercise the rights of the trustee against the third party.

when the agent fails to perform his obligations to the third party due to the principal's reasons, the agent discloses the principal to the third party, and the third party can choose the agent or the principal to claim rights, but only once.

what's the difference between unauthorized agency and apparent agency?

in the agency system, unauthorized agency and apparent agency are the most likely to cause litigation disputes. Unauthorized agency and authorized agency are relative concepts.

Generally speaking, if you are within the authority, you have the right to act as an agent; if you are not within the authority, you have no right to act as an agent.

。 Unauthorized agency means that when unauthorized agency occurs, the agency behavior is invalid, but the effectiveness of unauthorized agency is determined to be uncertain. The fundamental reason is to protect the interests of the bona fide counterpart, because during the period when the effectiveness is uncertain, the bona fide counterpart is given the right of urging and cancellation without waiting for its ratification, with the purpose of making the originally uncertain legal relationship determined as soon as possible, but the counterpart here must be "bona fide", that is to say, he did not know or should not know that he had no rights at the time of transaction. But if I don't ratify it after the transaction, then this agency behavior can't take effect for me, and the third party can only ask the unauthorized agent to perform it.

because it only produces the effect of contract binding between the third party and the unauthorized agent.

as for agency by estoppel, it must be an unauthorized agency. In order to form agency by estoppel, there must be external forms of agency, such as agency certificate, blank letter of introduction, blank contract, etc. When the unauthorized agent holds these external documents, the third party has legitimate reasons to believe and generate reasonable trust, and the bona fide third party must give priority to protecting and promoting the stability of the transaction.

this actually embodies the principle of good faith.

。 These agency certificates, blank letters of introduction, official seals or signatures on blank contracts must be true. If it is false, it does not belong to the jurisdiction of the agency by estoppel system, but may involve criminal offences.

in practice, there is another situation that is prone to disputes, that is, job agency behavior beyond authority.

Employment introduction does not mean that there must be a labor contract relationship. Actors may be hired people, or even labor dispatchers. Since it is a job introduction, the agent should act as an agent within the scope of performing his duties. Then the problem is coming. If he exercises his rights beyond his due authority, can he fight against a bona fide third party? According to the above provisions, although there is no direct conclusion on whether he can resist ultra vires behavior, he points out from the opposite side that the power of personnel performing tasks within a legal person or non-legal person cannot be restricted.

if a third party has legitimate reasons to believe and generate reasonable trust, it shall be deemed that the act should be carried out by a legal person or an unincorporated person.

the restriction of a legal person or an unincorporated organization on the scope of functions and powers of personnel performing work tasks shall not be against the bona fide counterpart.

Therefore, aiming at the problems of unauthorized agency and agency by estoppel, three points are summarized:

First, the bona fide counterpart under agency by estoppel has the effect of directly claiming the validity of agency behavior, and the agency effect directly belongs to the principal. However, if the bona fide counterpart under the unauthorized agency does not approve the transaction, it can only exercise the right of cancellation or directly claim the rights from the unauthorized agent.

Secondly,

If the third person under the agency by estoppel wants to prove that he is in good faith, he needs to provide more documents than the burden of proof in good faith under the agency without authority.

Third

In the case of agency by estoppel, a bona fide third party thinks that exercising the right of cancellation is more conducive to protecting their rights, and can exercise the right of cancellation without having to bear the consequences of agency by estoppel.

So, have you reached the key point of agency?

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Author/lawyer Li Rui

Li Rui, lawyer, graduated from northwest university of politics and law with a major in civil and commercial law. During his practice, he represented more than 1 lawsuits. He also has rich experience in company law and has provided professional and efficient legal services for many state-owned and private enterprises.

Seriously responsible and patient in communicating with customers, he is now a partner of Shanghai Zhongxia (Yinchuan) Law Firm.

business areas: insurance disputes, company disputes and legal training.

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This article is a lawyer's personal opinion, aiming at attracting valuable opinions and academic exchanges. It does not represent the views of Zhongxia Law Firm, nor is it a legal opinion. If you need a lawyer's legal advice or want to seek legal help, please contact a lawyer for legal services.