Company seal forged by the legal representative: is the contract valid or not?

Does a contract signed and affixed with a common seal forged by legal representative certainly fall into invalidity?

 A lawsuit of dispute of first instance regarding private lending between the plaintiff (lender) and the defendant (borrower) was raised to the court. The contract of loan was signed and affixed with common seal forged by the legal representative. The defendant company argued that the contract should be considered to be invalid, as the forged common seal was lack of authentic declaration of will.

After the hearing, the court supported the claims of the plaintiff: the contract should be regarded as valid. The reasons were: 1. The subject as the legal representative is qualified to sign the contract, which is an authentic declaration of will; 2. The authenticity of the common seal is reasonable to be trusted as it was held by the legal representative who also signed the contract. Therefore, the plaintiff had the reason to trust the contract in good faith. The original judgment was supported by the Supreme Court, and the debtor-creditor relationship between the plaintiff and the defendant was regarded as valid.

In terms of the damages caused by the legal representative, the Company is entitled to initiate legal proceedings in a separate case.

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