Legal basis: Civil Code of People's Republic of China (PRC).
Article 162 A civil juristic act carried out by an agent in the name of the principal within the scope of his agency authority is effective for the principal.
Article 163 Agency includes entrusted agency and legal agency.
An entrusted agent shall exercise the power of agency as entrusted by the principal. A legal agent shall exercise his power of agency in accordance with the provisions of the law.
Article 171 Where an actor has no agency, exceeds the agency or remains an agent after the agency is terminated, it shall not be effective to the principal without ratification by the principal.
The counterpart may urge the principal to ratify it within 30 days from the date of receiving the notice. If the trustor fails to declare it, it shall be deemed as refusal to ratify it. Before the act committed by the actor is ratified, the bona fide counterpart has the right to revoke it. Revocation shall be made by notice.
If the act committed by the actor is not ratified, the bona fide counterpart has the right to demand the actor to perform the debt or demand the actor to compensate for the damage he has suffered. However, the scope of compensation shall not exceed the benefits that the counterpart can obtain when the principal ratifies.
If the counterpart knows or should know that the actor has no right to act as an agent, the counterpart and the actor shall bear the responsibility according to their respective faults.
Article 172 If the actor has no agency right, exceeds the agency right or the agency right is terminated, and the counterpart has reason to believe that the actor has the agency right, the agency act is valid.