A power of attorney is the authorization given by the principal to the agent, by means of a legal transaction, to contract on his behalf. The power of attorney or act by means of which the powers are granted, constitutes a unilateral and receptive legal business, which generally accompanies a contract and especially a mandate given by the principal to the agent. Hence, in traditional doctrine, voluntary representation was studied in relation to the mandate contract… the modern technique, on the other hand, followed by the German Civil Code and the Swiss Code Obl. Swiss Civil Code carefully separates the mandate, from which rights and duties are generated for the mandatary, and the power of attorney, which only confers attributions and which rests, purely and exclusively, on the unilateral will of the principal… The power of attorney is exempt from any form and can therefore be granted tacitly…. Thus, for example, if the representative is entrusted with the execution of a business, by means of a mandate or service contract, there will be reason to assume that he is also granted the necessary powers for this purpose, without which it would not be possible, for example, to collect a debt from the debtor…. With respect to the partnership, the law establishes the presumption that the partner to whom the management of corporate affairs is entrusted, has powers to represent the entity… it is sufficient to assign to the representative a visible position or employment that normally carries with it representative powers, according to customs and it is also sufficient to awaken, by any other acts, the appearance that power has been granted….
Generally, powers of attorney are granted in the shadow of a legal relationship that obliges the agent to carry out an activity in the interest of the principal (or in the common interest of both). This legal relationship generally has the characteristics of a mandate, a service contract or a partnership….
It is also possible, albeit by way of exception, to grant a power of attorney in the absence of a legal relationship on which it is based, for example, in anticipation of a service contract that is about to be concluded. Likewise, it may happen that a mandate is granted to two persons and only one of them obtains powers of attorney, or vice versa, that there is only one agent, while collective powers of attorney are conferred for the business to be carried out in execution of the mandate.
The limitations placed on the power of attorney (power to contract with a specific person) should not be confused with the rules or instructions that the principal usually gives to the attorney-in-fact with respect to the use of his powers of attorney. These… do not affect the power of attorney, but the legal business on which it is based – mandate, leasing of services, etc. – and oblige the agent to act in accordance with them… These instructions do not restrict the legal possibilities of the agent, but only the lawfulness of his actions. Thus, a contract entered into by the agent in breach of his instructions is binding on the principal, although the principal may claim compensation from the agent for any damage caused to him by the breach of the mandate. The third party… does not need to abide by the instructions even if he knows them, since these… only affect the internal relationship of the mandate, the respect of which is incumbent only on the agent… But this does not mean that the third party can conspire with the disloyal representative to abuse the powers and impose on the principal, through this fraudulent maneuver (consilium fraudis) a business that is detrimental to his interests. The contract thus concluded, even without infringing the limits of the power of attorney, would not bind the principal. There is here an infringement of good faith, because although the third party does not abuse a right, he abuses the possibility that the power of attorney gives him to conclude a contract with the agent at the expense… of the principal….
It may happen that the principal may limit or revoke the powers of attorney, even though the obligatory relationship – mandate or contract of services or work – to which they respond still subsists. This right of revocation is particularly important when the relationship on which the power of attorney is based, for example, the service contract, cannot be terminated immediately and the principal has lost confidence in the dependent and fears that the latter may abuse his powers.
The revocation does not affect the rights deriving from the principal relationship; thus, the employee whose powers of attorney are revoked before the end of the employment contract, naturally retains the rights that he has under the contract, and mainly the right to receive his salary…. The revocation can be tacit, that is to say, be verified by means of acts from which the representative can infer the revocatory intention, as it would be, for example, to ask him to return the deed of power of attorney, the fact of appointing another representative or to celebrate the business by himself, etc. Powers of attorney granted in common may be revoked individually by any of the grantors, and likewise the hereditary powers of attorney by any of the co-heirs, as far as their person is concerned: in fact, the power of revocation tends to protect personal interests and does not appear in the hereditary patrimony, which can only be disposed of collectively.
The right of revocation… cannot be waived…; however, the German Civil Code recognizes the possibility of waiving this right in certain cases. The power of attorney is considered revocable even if it is granted in the interest of the attorney-in-fact himself, as is the case, for example, when the agent is authorized to collect a claim of the principal and to keep the money for himself in payment of his claim against the principal. However, even if the waiver of the right of revocation is null and void, the principal may validly undertake not to exercise it, provided that this promise does not restrict too much the principal’s freedom of disposition in the specific case. Such a promise does not prevent him from revoking the power of attorney, but obliges him to compensate the damages inflicted on the representative by the revocation; moreover, it can be reinforced, in our opinion, by means of a conventional penalty.
… The personal rights deriving for both parties from the principal relationship do not suffer detriment because the power of attorney expires. The power of attorney subsists when it has been expressly agreed or when the nature of the business so requires. Powers of attorney may be granted to survive the principal, or even to manage business after the principal’s death (mandatum post mortem). The acts of disposition that the testator entrusts to an attorney-in-fact for after his death must be considered as dispositions mortis causa, since the latter can freely revoke the mandate until the moment of death, but for this reason they are not subject to the formal requirements of the acts of last will… It may happen that the powers survive the testator without the need for him to order it because… the nature… of the business… requires it… so …. when they are conferred within an industry or enterprise that is not interrupted by the death of the principal….
Powers of attorney are considered to subsist as long as the attorney-in-fact has no notice of their extinction due to the death… of the principal… the attorney-in-fact is considered to be the representative of his heirs… the rights acquired and the obligations contracted by him belong to the inheritance.
Powers of attorney are also dissolved by the death of the attorney-in-fact… There are reasons to assume that powers of attorney are hereditary, for example, when they are granted to the owner of the company and the company survives him….
… The principal can only oppose the revocation of the powers of attorney to the third party in good faith when he has been notified of it…
The substitution of the attorney-in-fact is valid when the power of attorney itself authorizes it, when changed circumstances make it necessary – as if, for example, the attorney-in-fact becomes seriously ill – or when it concerns matters in which it is usual practice to substitute the attorney-in-fact. The substitution does not imply a transfer of powers, since the attorney-in-fact, even after appointing a substitute, continues to retain his status as representative, unless he resigns or the power of attorney has been granted under the resolutive condition that it will expire as soon as a substitute is appointed. The substitution is a new power of attorney granted by the agent on the basis of the power of attorney granted to him and on behalf of the principal. Generally, the scope of this new power of attorney does not go beyond the limits of the other. The substitute is the representative of the principal, not of the attorney-in-fact, and acts in the name and on behalf of the principal. His representative powers are based on two powers: the one conferred on him by the first representative and the one he receives from the principal. The legal effects of the acts that it celebrates are given in head of this one and not of the substituted one. The principal obligatory relationship, e.g. the mandate, on which the powers of the substitute are based, may also be contracted by the attorney-in-fact in the name of his principal, in which case the rights and duties arise from the contract concluded between the two, or in his own name, in such a way that the substitute has to comply, as regards the exercise of his powers, with the instructions of the one he substitutes, to render accounts to him and to claim from him the reimbursement of all his disbursements. The powers of the substitute do not depend, as to their duration, on the duration of the powers of the person whom he replaces, unless he is appointed only for the time during which the latter is the representative. They do not expire either by death of the person being replaced and are revoked by means of a declaration addressed by the principal to the substitute, or on the initiative of the representative himself, if the powers of the latter have not yet expired and he is empowered to revoke them.
If a power of attorney is granted in favor of several persons, it is necessary to distinguish whether it is a question of individual or joint and several powers of attorney or… collective powers of attorney… depending on whether each representative can act on his own or whether they must all act together… if each representative is given a power of attorney in which only his name appears, the power of attorney is joint and several; if… the others are mentioned, it is a collective power of attorney….
The collective representatives need not act all together nor simultaneously, but the business… only becomes effective when the declarations of all are gathered… The powers of attorney being individual… it can easily happen that the desired contract is concluded through several channels, in which case the principal will have no choice but to assume the two obligations… If several representatives dispose through different channels of the same object, the rules of double sale apply…