Compiled from: Zhihu, Southern Metropolis Daily
  
Case review
Initially: Tencent sues Laoganma for overdue advertising fees of over 10 million yuan
 
Tencent stated that in March 2019, it signed a "Joint Marketing Cooperation Agreement" with Laoganma, where Tencent allocated resources to promote Laoganma's chili oil series. Tencent fulfilled its obligations as agreed, but Laoganma failed to pay according to the contract. After repeated reminders yielded no results, Tencent had no choice but to file a lawsuit.

 
 

On June 29, the Nanshan District People's Court in Shenzhen issued a civil ruling, ordering the freezing and seizure of 16.24 million yuan in Laoganma's assets. It turned out that in 2019, Laoganma had placed tens of millions in advertising with Tencent, which fulfilled its obligations, but Laoganma did not pay as per the contract. Tencent had to sue and apply for asset preservation, leading to the court freezing Laoganma's corporate account.
 
In response, netizens joked: "Laoganma, which claims to never advertise, finally did?" "Did Laoganma advertise on Tencent? I never saw it?" On one side is the domestic internet giant Tencent, on the other is the national chili sauce brand Laoganma. Just as netizens were enjoying the drama, an unexpected twist arrived.
 
Twist: Tencent, you were scammed. I never cooperated with you.
On June 30, Laoganma issued a statement: "Our company has never had any commercial cooperation with Tencent." The internet giant Tencent was actually deceived? This immediately caused an uproar online, with many netizens saying, "Was the advertiser actually 'Laoganma'?"
 
Another twist: Three people forged Laoganma's company seal to sign a contract with Tencent.
On July 1, Guizhou police reported: "Our preliminary investigation has found that three individuals forged Laoganma's company seal, impersonated the company's marketing department manager, and signed a cooperation agreement with Tencent."
 
At this point, everyone understood. Tencent initially thought it had signed an advertising contract with Laoganma, but after Tencent fulfilled all the contract terms, Laoganma owed 16.24 million yuan in advertising fees. So, Tencent aggressively sued Laoganma. Unexpectedly, even after the court ruling was issued, Laoganma stated it had never cooperated with Tencent. Just as Tencent was quickly embarrassed, Guizhou police stepped in and announced that three people had impersonated Laoganma and signed the contract with Tencent. Within just three days, there were endless twists, and in the end, netizens felt sorry for Tencent, saying that Tencent not only failed to get the money but also became a laughingstock.

 

 
Focus of the case
The case now ultimately rests on the three individuals reported by Guizhou police. So, what legal responsibilities do these three people bear for forging Laoganma's company seal and signing a contract with Tencent?
 
1. Apparent Agency
Apparent agency refers to a situation where the agent in fact has no authority, but the counterparty has reason to believe that the agent has authority to conduct legal acts, and the legal consequences of such acts are borne by the principal.
 
Apparent agency can produce two consequences: First, the rights and obligations set by the acts of the apparent agent are borne by the principal. Second, if the principal suffers losses due to bearing the consequences of apparent agency, they have the right to claim damages from the apparent agent.
 
In this case, these three individuals were not authorized by Laoganma Company. However, if there is a certain factual or legal relationship between these three individuals and Laoganma Company (i.e., an appearance of authorized agency exists), then in such a situation, the counterparty (i.e., Tencent Company) has reason to believe that these three individuals have authority. If a contract is signed with them, it is naturally permissible. However, Tencent Company's basis for belief cannot be too weak. Therefore, generally speaking, if these three individuals were once employees of Laoganma Company or once possessed Laoganma Company's seal, it would be very easy for the counterparty to believe they have authority. In such a case, the actions of these three individuals constitute apparent agency.
 
The resulting consequence is that Laoganma Company must first pay the advertising fees to Tencent, and then Laoganma Company can seek recourse from the three individuals who acted as apparent agents.
 
2. Unauthorized Agency in the Narrow Sense
Unauthorized agency in a narrow sense refers to the act of conducting civil actions in someone else's name without being entrusted or authorized by that person, without legal basis, and without designation by a people's court or a designated entity.
 
In this case, it means these three individuals had no relationship with Laoganma Company; they simply privately engraved a seal and signed a contract with Tencent. Under these circumstances, since there was no appearance that could lead others to believe they were authorized agents, and Tencent still signed the contract with them, the matter is unrelated to Laoganma Company, and Tencent should directly seek compensation from the three individuals.

 
 

 
[1] The author's perspective
From this perspective, for Laoganma Company, if it can prove that the seal was indeed forged and that the fraudsters had no connection to it, then Laoganma Company can distance itself and avoid liability. Therefore, Laoganma Company's immediate decision to call the police and have the authorities investigate and report is undoubtedly a way to prove its innocence.
 
In my opinion, it is difficult for Tencent to attribute responsibility to Laoganma Company in this case. On one hand, Tencent failed to strictly vet its partner. Many aspects of this cooperation violated basic business principles, such as whether Tencent received the advance payment or confirmed the partner's copyrighted images—these are essentially Tencent's own faults. On the other hand, as it stands, there is no room for apparent agency in this case, because Tencent likely sought compensation from Laoganma only after the advertisement was placed, which does not meet the standard of a "bona fide third party."
 
Here, I would like to remind everyone to thoroughly verify the other party's identity information and authorization scope before signing a contract. If one can be more careful and diligent, such criminals will likely be nipped in the bud. Only through genuine mutual benefit can a win-win outcome be achieved.