Power of Attorney
Key Takeaways:
A power of attorney grants legal authority to act on behalf of another person.
Types include general and special (limited), each serving specific purposes.
Precise drafting and legal guidance are essential for a valid and effective power of attorney.
So you find yourself in the position where you will be out of the country for a long period of time or are simply not able to manage your affairs properly i.e. due to Covid travel restrictions you cannot get to a certain place or find yourself in quarantine etc.
But you still need to conduct important business affairs and enter into crucial agreements. This is especially the instance for companies where their authorised signatory is unable to attend to their authorised responsibilities and requires someone to step in.
What to do?
You (the “principal”) give someone else (the “agent”) authorisation to act on your behalf and either perform various acts (a general power of attorney) or one specific act (a special power of attorney).
And you give this ‘power to act on your behalf” by means of a power of attorney. Remember, it is an accepted notion that no person is by nature able to act on behalf of another – he/she must have the necessary authority to do so. This authorisation is commonly given in the form of a power of attorney.
So, what is a power of attorney?
A power of attorney is a legal document, whereby a principal gives authority to an agent to conclude juristic acts on his/her behalf. A juristic act is an act whereby legal relationships are created and which has legal consequences, for example entering into an agreement.
What does a power of attorney entail?
The power of attorney will set out the nature and scope of the agent’s powers to act on behalf of the principal, including but not limited to signing of legal documents, entering into contracts, opening and closing bank accounts, selling or purchasing property and instituting legal action.
But, a power of attorney is not a contract, rather it is an expression of will by the principal that the agent shall have the power to act on his/her behalf.
Through signing a power of attorney the principal not only empowers the agent to act, but also indicates to third parties his/her will to be bound by acts performed by the agent. A properly authorised agent who validly enters into a contract on behalf of another is therefore protected from any liability arising from that contract. However, if the agent is not properly authorised, the principal acquires no rights and incurs no duties in respect of that juristic act and the third party can hold that agent personally liable for breach of “warranty of authority”.
So be sure to execute your power of attorney properly (see below).
What are the legal requirements for a power of attorney?
A power of attorney needs to be reduced to writing and signed by the principal, giving the agent authority to act on his/her behalf. The principal’s signature has to be witnessed by at least one person to confirm that it was indeed the principal signing the document. Importantly, the principal must have full contractual capacity to grant the agent authority to act on his/her behalf. It must also not be done under duress.
As there are no prescribed forms that exist in our law when drafting a power of attorney, it must be drafted with the utmost care and due diligence to protect both the principal and agent. The intention of the principle is tantamount to the core of the document. So, ensure that the person with the necessary skill and knowledge assists you with the drafting and conclusion of the power of attorney.
Can I get a power of attorney if a person is mentally incapacitated?
A person declared mentally incapacitated and therefore incapable of managing their own affairs, will not be able to sign a power of attorney as they will not have full contractual capacity to grant the agent authority to act on his/her behalf. In this case, an application will have to be made to appoint a curator to manage the person’s affairs.
Furthermore, South African common law determines that a power of attorney terminates once the principal becomes mentally incapacitated. In other words, when a principal is no longer able to perform the act in question him/herself, the agent can no longer do it for him.
A validly concluded power of attorney therefore automatically lapses as soon as the principal loses the legal capacity to act. If the agent continues to act on this now void power of attorney, he/she will exposes him/herself to personal liability for any losses suffered by a third party as a result of any transactions performed under the void power of attorney.
Can I get a power of attorney if a person is diagnosed with early-onset Alzheimer’s or dementia?
If the principal is still within sound mind and knows exactly what he/she is doing, the power of attorney will be binding and valid. The principle should have full contractual capacity to grant the agent authority to act on his/her behalf when signing the power of attorney.
But remember (as per the above), if the principal becomes mentally incapacitated, the agent can no longer act on his/her behalf and the power of attorney is thus void.
What powers are not allowed under a power of attorney?
Nothing illegal.
If the principle gives the agent authority to commit a crime in the power of attorney, this will automatically be invalid and against the public interest.
The actions and powers which have been given to the agent must also be possible to execute. If the action is physically impossible, such as going to Mars, the authority will be invalid and not binding.
What is the difference between a Special power of attorney and a General power of attorney?
A general power of attorney is by its very nature, used for the same purpose as its name implies. It confers general powers from the principal to the agent to perform and carry out various legal acts. It therefore confers more extensive powers on an agent. For example the ability and power to bring amendments to a sale agreement, signing a sale agreement and taking possession of the property on behalf of the principal. Together with all other associated actions to ensure the sale agreement is finalised without complication.
A special power of attorney on the other hand, serves a specific purpose in that it grants very limited and concise powers to the agent. In other words, it relates to a specific act or acts and the scope of the agent’s authority only entails that action and nothing else. This will be applicable where, for example, the principle only requires the agent to sign a lease agreement on his/her behalf and nothing more.
When does a power of attorney come to an end?
The agent’s powers under the power of attorney will be terminated automatically in the following scenarios:
Should the principal or the agent pass on;
Should either of them be sequestrated or declared mentally incapacitated;
Should the principle provide the agent with the power to conduct a specific action and such action has been completed, the mandate of the agent will automatically terminate, and
The principal also has the right to revoke the agent’s power of attorney by signing a document setting out the details and the effective date of the revocation of same.
Powers of attorneys signed in one country for use in another
Powers of attorney executed inside South Africa for use outside of South Africa must be executed in the presence of a Notary Public. Depending in which country the power of attorney is going to be used in, it must also be sufficiently authenticated (see below) as stated in the “Hague Convention Abolishing the Requirement of Legalisation for Foreign Public Documents”.
In addition, if the country in which the power of attorney is going to be used in is a signatory to the Hague convention, the documents must be authenticated according to the Apostille process (see below).
As specialists in the field of Notarial Work we are able to assist you with legalising and notarising your power of attorney (whether general or special) with ease.
Must a power of attorney be authenticated?
Authentication of a formal document, like a power of attorney, means to legalise it and is specifically required for use abroad i.e. when a power of attorney is signed in one country for use in another (as set out above).
Legalising a document means that official (public) documents executed within South Africa for use outside of South Africa are affixed, sealed and signed either with an Apostille Certificate (if the destination country is a signatory country of the Hague Convention) thereby authenticating the origin of a public document, or with a Certificate of Authentication (if the destination country is not a signatory of the Hague Convention).
This process is done by sending it to the Legalisation Section of the Department of International Relations and Cooperation (“DIRCO”) in order to get it affixed with an Apostille seal or a Certificate of Authentication (as per the above).
We are able to assist you with the process of legalising a Power of Attorney (if signed in front of the Notary). So feel free to get in touch!
Must a power of attorney be notarised?
You would need to notarise a power of attorney should you require copies of it (especially for authentication or legalisation purposes).
And you would need copies of it only if your documents are going to be used abroad (as per the above). And for this purpose, they can only be notarised before a Notary. The Notary attaches a completed and signed notarial certificate to the front of the copy of the original document, and affixes a seal next to their signature thereby verifying that it is a true copy of the original.
In addition, a Notary would only be able to notarise a power of attorney if it was signed in front of him/her.
How long is a notarised power of attorney valid for?
Simply put, it all depends on the authority requesting the notarised document.
Why should we trust Benaters to notarise a power of attorney?
At Benaters we pride ourselves on the fact that we are able to offer a specialised niche service, always remembering that due to the ethical nature of the services which Notaries render (and the specialist knowledge required to draft and/or legalise certain documents), the office of a Notary is considered to be held to a higher standard of care. And we take that extremely seriously (and therefore hold ourselves to very high standards).
We are proud to offer this specialised service to you! So please get in touch with us today to see how we can support you with your power of attorney.