【Case 1】Wang and the outsider Chen purchased a four story house in Zhongshan City, intending to use it as the business premises required for the establishment of a certain hotel. Wang and the outsider Chen are the initiators of the hotel. On November 5, 2011, one of the initiators, Wang, signed an "Engineering Contract" with Han in his personal name, agreeing that Han would be responsible for the internal decoration project of a certain hotel. The total contract price was 2.2 million yuan, and the agreed construction period was until February 20, 2012. The remaining 500000 yuan would be paid within three months after the completion of the decoration project. If Han failed to complete the project on time and with quality, he would need to pay a penalty for overdue construction, The penalty shall be 5% of the total contract amount per day. The above contract is accompanied by a single copy of the project details, which specifies the specific decoration projects agreed upon in the contract.

In March 2012, after the renovation project was basically completed, Han received a total of 1.7 million yuan in project payment from Wang and the hotel, with an remaining 500000 yuan. On April 11, 2012, a certain hotel began operating externally without any acceptance or settlement by both parties. As the initiator and shareholder of XX Hotel, Wang signed an "Engineering Contract" with Han in his personal name. However, the decoration project involved in the contract was actually prepared for the establishment of XX Hotel, and the actual user was also XX Hotel. XX Hotel is confirming this matter.

On March 21, 2013, Han filed a lawsuit against Wang and XX Hotel in court, requesting a decree that Wang and XX Hotel pay Han a project payment of RMB 500000 and interest. Wang and the hotel filed a counterclaim, claiming that Han failed to complete the decoration project as agreed in the contract. They requested the court to order that Han pay a penalty of 1 million yuan for overdue completion of the project; Han bears the responsibility for quality maintenance.

The court believes that according to Article 2 of Interpretation 3 of the Company Law, if the initiator signs a contract in their own name for the establishment of a company, and the counterparty requests the initiator to assume contractual responsibility, the people's court should support it. After the establishment of the company, if the contract specified in the preceding paragraph is confirmed, or if the party to the contract has actually enjoyed the contractual rights or fulfilled the contractual obligations, and requests the company to bear the contractual responsibility, the people's court shall support it. Due to the confirmation of the fact that Wang and Han were entrusted to sign the "Engineering Contract" by a certain hotel and were actually entitled to the contract rights, Han also clearly stated that he chose a certain hotel as the responsible party for the contract. Therefore, a certain hotel must pay the remaining payment of 500000 yuan for the decoration project to Han.

【Case 2】On May 28, 2010, plaintiff Lu signed a "Shopping Mall Lease Contract" with a third party to lease the shopping mall from the first to fourth floors of Yizhou Bus Passenger Station for an eight year lease term. On April 22, 2012, plaintiff Lu and defendant Li signed a "lease contract" to sublet the first floor of the rented shopping mall to defendant Li. After the contract was signed, the defendant deposited a total of 700000 yuan of performance bond into the account designated by Lu, and installed an elevator worth 50000 yuan. Lu acknowledged receiving 750000 yuan of performance bond.

On May 15, 2012, Yunhong Company was established, with the legal representative being the defendant Li, and its business scope being venue leasing. After the establishment of Yunhong Company, Li offered to rent the leased premises in the name of the company. Starting from the end of May, Yunhong Company has successively signed lease contracts with dozens of merchants. In May 2013, a dispute arose between the two parties over the issue of rent due to the defendant Li failing to pay rent to the plaintiff Lu. After May 16, 2013, Lu issued a written "Notice Letter" to the owners of various shops, informing them that they would terminate the "Lease Contract" signed with Li on May 14, 2013, take back the site, and carry out site clearance such as water and power outages, and closing the gate. On July 22nd, Lu filed a lawsuit with the court, requesting the termination of the "Lease Contract" signed with defendant Li and requiring the defendant to pay rent of 330978 yuan and a penalty of 1.4 million yuan.

The court believes that according to Article 2 of Interpretation 3 of the Company Law, Lu has the right to choose to request Li or Yunhong Company to assume responsibility, which is in accordance with legal provisions. Li's failure to pay the rent as agreed in the contract constitutes a breach of contract, but Lu failed to prove that the notice of termination sent to Li on May 14, 2013 had been delivered, and his termination of the contract did not take effect. The plaintiff requested the termination of the lease contract signed by the plaintiff and defendant through litigation. The contract was terminated on August 2, 2013, from the date the defendant received a copy of the plaintiff's complaint. If the liquidated damages agreed upon in the contract between both parties are excessively higher than the losses caused by the defaulting party to the non breaching party, they should be appropriately reduced. Judgment: The lease contract between both parties was terminated on August 2, 2013; Li paid rent and liquidated damages of 152000 yuan to Lu; Reject Lu's other litigation requests.

【Comment and analysis】Since the originator signs the contract in his own name, the counterparty to the contract has reason to think that the rights and obligations of the contract exist between him and the originator. However, since the rights of the contract may be enjoyed by the company, and the contract is actually performed by the company, the counterparty to the contract is given the option to choose the more favorable party to bear the contract liability according to the strength of the originator and the company.

【Case 3】On June 21, 2013, Liu signed the "Decoration Construction Contract" with Xiangsheng Company in the name of Zhonglian Company, and agreed that Xiangsheng Company would carry out interior decoration of the house of Zhonglian Company. Mr. Liu is the legal representative of Zhonglian Company, which was established on July 30, 2013. After the completion of the renovation, Zhonglian company, Liu Mou refused to pay the project money. Xiangsheng company to the court, required to order Zhonglian company, Liu Mou jointly pay 23,400 yuan decoration.

The court held that according to the provisions of Article 3, paragraph 1, of Interpretation III of the Company Law, where the promoter signs a contract in the name of the company under establishment, and the contract counterpart requests the company to assume contractual liabilities after the company is established, the people's court should support it. According to the ascertained facts, although Liu Mou and Xiangsheng company signed the "construction contract", Zoomlion company had not yet been established, but Liu Mou signed the "construction contract" in the name of Zoomlion Company, and paid 15,000 yuan on behalf of Zoomlion Company, and Zoomlion Company recognized that Liu Mou's behavior was the company's duty behavior. Therefore, the court confirmed that the legal consequences of Liu Mou signing the decoration contract shall be borne by Zhonglian Company. Judgment Zhonglian company, Liu Mou should pay the remaining decoration project money 8400 yuan to Xiangsheng company.

【Comment and analysis】For a market economy, transaction security is crucial. The security of law is divided into static security and dynamic security, static security is to maintain the status quo of people's vested interests, and dynamic security refers to the security needed to achieve wealth appreciation. Under normal circumstances, static security and dynamic security will not cause conflict, but in the pre-establishment contract, because the established company does not have the legal personality, the contract signed in its name should be invalid, but in order to ensure the dynamic security of the transaction, the civil and commercial laws of various countries should recognize the validity of the pre-establishment contract and protect the interests of the opposite party.

The act of establishing a company is a legal act of creating a company and obtaining the status of a legal person. This kind of behavior is the common behavior of the promoters for the purpose of establishing the company, and it is the common behavior of several people with the same purpose. In the following articles, we will continue to analyze the many disputes that may result from irregularities in the company establishment process. Hillhouse Law Firm will give full play to its professional advantages and effectively help enterprises prevent relevant legal risks; We will also provide enterprises with more forms and more abundant legal service projects according to the development of the industry and the actual situation of enterprises, and guide enterprises to make scientific decisions and standardize development.