Third Party Suspicion of Lack of Authority on the Part of Company Agents – A Comparative Study and a Suggested Rule
Bibliographic record
Abstract
A risk affecting 3rd parties entering into contracts with companies is whether the representative of the company has authority to enter into the transaction, and whether that person has complied with internal company procedures. In the common law world these issues are governed by the law of agency and the ‘internal management rule’ respectively. In the People’s Republic of China (PRC) applicable rules are found in the Contract Law and the Company Law. Recent decades have seen a divergence in approaches in the common law world, with the common law retained in some jurisdictions and superseded by legislation in others. This has led to differences in the law, particularly with respect to the critical issue of under what circumstances 3rd parties contracting with company representatives lose the right to assume that the representative has the authority they appear to have or, to state the issue differently, what level of knowledge or suspicion of irregularity a company should prove a 3rd party has in order to avoid liability for the acts of the company’s agent. These differences have significant implications for inter-jurisdictional contracts. This article examines the law in Singapore, Hong Kong, Australia, New Zealand and the PRC and assesses the extent to which the rules in each jurisdiction satisfactorily balance the interests of companies and third parties and serve the interest of commercial convenience. It notes that the approaches in Singapore and Hong Kong, which both retain the common law, and in the PRC, which has independently developed almost identical rules, strike the appropriate balance between the rights of companies and 3rd parties contracting with them, whereas statutory formulations in Australia and New Zealand do not. The article concludes with a model formulation of applicable rules which, if adopted, would remove uncertainty in this area.
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How this classification was reachedexpand
Full frame machine prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. The Gemma side is a direct model label for every work in the frame, read from the title-only record. The Codex side is a classifier learned from the 10,348 direct Codex labels and calibrated to design-weighted sample rates; fields without enough sample support carry no Codex call. Candidate is the union of the two sides; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels.
Distilled classifier scores by category (both heads)
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.010 | 0.018 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.001 | 0.001 |
| Bibliometrics | 0.004 | 0.005 |
| Science and technology studies | 0.004 | 0.007 |
| Scholarly communication | 0.007 | 0.007 |
| Open science | 0.001 | 0.003 |
| Research integrity | 0.002 | 0.002 |
| Insufficient payload (model declined to judge) | 0.007 | 0.001 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one source (direct Gemma or distilled Codex), not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".