Judicial Standards for Apparent Agency Defense in PRC Corporate Litigation
PRC courts invalidate apparent agency defenses when counterparties fail to inspect corporate articles of association or accept non-corporate payment account routing.
Contract专用章
Meaning
Official corporate seals serve as the primary legal instrument for legalizing commercial contracts executed by enterprises registered in China. A contract专用章 is a designated corporate seal used exclusively by authorized representatives to bind an enterprise to commercial agreements and supply arrangements. Under Chinese corporate law, an impression from this specific seal creates binding legal obligations equivalent to an impression from the primary corporate chop when applied within its designated scope.
Administrative regulations issued by the Ministry of Public Security require companies to register every official seal with local public security bureaus and maintain strict control logs.
Functional Scope
Corporate management grants execution power to sales managers or procurement directors by entrusting them with this specialized sealing device. Stamping a document with a contract专用章 binds the enterprise to payment terms and delivery commitments specified in the signed instrument. This seal cannot legally validate banking applications or court submissions, which require the general corporate chop or financial seal.
Counterparties executing supply contracts in China must verify that the seal impression matches the registered name recorded on the business license.
Administrative Control
Enterprise governance protocols require keeping custody logs that record every application of the contract专用章 alongside contract numbers and manager signatures. Physical security measures include keeping the seal in electronic safes or deploying automated stamping machines that require dual managerial approval before applying an impression. Unauthorized use of a contract专用章 by an employee creates legal liability for the firm unless the enterprise proves the counterparty acted in bad faith.
Evidentiary Weight
Chinese courts view a genuine impression of a contract专用章 as prima facie evidence of corporate intent to execute an agreement. Burden of proof shifts to the enterprise to prove forgery or unauthorized theft when disputing a contract bearing its registered seal impression.