| The original legislative purpose of articles 402 and 403 of the 1999 Contract Law was to solve special problems in foreign trade agency. The location and content of these two provisions changed from time to time during the legislation process. Later, due to the lack of a thorough understanding of the transplanted system and the stimulation by some special domestic factors, severe alienations have happened to these provisions, especially Article 402, which belongs to neither the civil law system nor the common law system. Article 402 magnifies many times the effect of the system of undisclosed agency on the privity of contract provided for by Article 403, and this has a great impact on third parties. Now the original legislative purpose has already faded out, but the provisions remain, causing frequent judicial chaos. Specifically, these two provisions do not make the law clearer, but on the contrary are used by parties to evade liabilities and other legal consequences. Moreover, different courts have different understandings of these provisions. As a result, like cases are rarely treated alike. It is suggested that, in the upcoming Civil Code, Article 402 should be deleted completely and Article 403 should modify by changing its location in the code and adding qualifications to it, so as to better maintain the privity of contract, while at the same time remedying the unfair treatments in the event of the agent's insolvency in traditional civil law jurisdictions. |
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