Understanding Power of Attorney and Legal Representation
Power of Attorney and Legal Representation
Concept
Direct representation exists when a person (representative) performs a legal act in another person’s (principal) name and behalf so that the effects of such act directly and immediately affect the person represented.
When representation exists, the act executed by the representative shall fall within and be the responsibility of the principal. In order for the acts of the representative to affect the principal, it is necessary that a power of attorney is previously granted to the representative (or that the principal ratifies what has been already done by the representative (representante) in the case of a “representative without power”).
The power of attorney is not only a power to litigate but an instrument whereby one person appoints another so that he can perform acts in his name and on his behalf.
Types of Representation
- Voluntary representation: The principal entrusts the representative to carry out legal acts in his name and on his behalf.
- Legal representation: The law appoints someone to represent another person, without taking into account the will of the person represented. The law also defines the powers of the representative. For example, parents have legal representation over their children. Tutors are also legal representatives.
Act of Empowering
The act of empowering is the act by which the principal grants another person the power to act in his name and on his behalf. It is documented in the power of attorney.
Apparent Representative
Representation can be apparent. This exists when there is a behavior that makes third parties think that the empowering exists. Nevertheless, this will have to be considered under the prism of good faith. It has to be reasonable for that third party to believe that the empowering existed. For example, third parties cannot defend the existence of an apparent representation when the usages impose for such acts a written authorization.
The Object of Empowering
With regard to the object of empowering, we can differentiate between general and special powers:
- General power: Granted to perform all legal acts of the principal.
- Special power: For certain determined acts.
- Express power: The law requires an express power to be granted in order to compromise, alienate, or mortgage goods (art. 1713.2 Cc).
- Powers granted “in general terms”: The law requires a power of attorney granted “in general terms” (e.g.: “I grant power for all my affairs”) only covers acts of administration.
Abuse of Power
There is an abuse of power on the part of the representative when he performs actions following different aims to those for which he was empowered, generally for his own benefit. The representative acts within his powers but with a purpose different than the one established by the principal. In these cases, the act of the representative is valid against third parties (unless they did not act in good faith; that is, with knowledge of the abuse), but he is responsible to the principal.
“Representation” Without Power or Falsus Procurator
We speak about representation without power when the representative performs a legal act in the name of someone but without the necessary empowering to do so. It can be because the power of attorney has expired, because it never existed, or because the power exists but the representative is acting outside the power (e.g. the representative is empowered to sell but he donates or mortgages). A person who acts without power is not a true representative. In legal terms, he is referred to as falsus procurator.
Ratification of the Representation
The act performed by the falsus procurator is irrelevant for the person in whose name it was executed unless he ratifies it. The ratification is a unilateral act in law. When ratified, the act which was initially ineffective produces all effects as if it had been executed by an empowered person.
Types of Ratification
- Express ratification: The ratification can be express if the person in whose name the act was executed expressly states that he intends to be bound by the act performed by the falsus procurator.
- Tacit ratification: The ratification can be tacit if the person in whose name the act was executed behaves in a manner that shows he agrees with the act performed by the falsus procurator.
Furthermore, the ratification is retroactive, that is, the act which is ratified becomes effective for the principal since its conclusion.
Extinction of Empowering
Apart from the general rules (e.g. expiry of the power or fulfillment of the task of the representative), there are special causes for the extinction of empowering:
- The power can be revoked by the principal. The principal can revoke the power at his will. The revocation is a unilateral act of the dominus which shall be effective from the moment the representative has knowledge of it. Nevertheless, when the power has been granted to contract with certain persons, its revocation cannot prejudice them unless they were given due notice.
- The representative might renounce the power. This resignation shall be effective from the moment the principal has knowledge of it. Nevertheless, good faith requires that the representative cannot immediately abandon his task, and he should continue with it until the principal has been able to take the necessary measures to solve the problem.
- Finally, the representation ends in case of death, insolvency, or prodigality of the representative or principal.