The principal who creates the power of attorney is the one who determines the amount of power he wants to give to the agent. He can choose to give him the authority to deal with only one particular issue or to handle most of his personal and financial matters. Irrespective of the type of power given, the agent is responsible for keeping accurate records of all transactions and businesses that he makes on behalf of the principal.

A power of attorney can be used for various things. It can allow the agent sign a contract for the principal. It can be used to give the agent the power to sell a property, to make health care decisions, to do financial transactions, or to sign legal documents that the principal cannot do personally for one reason or the other. However, the principal must have the legal right to carry out such acts himself before he can give such power to the agent.

A power of attorney can be given for a very specific purpose, such as taking money out of the principal’s account to pay a particular bill. It can also be given for general purposes, such as allowing the agent to do anything at all on behalf of the principal which the principal can lawfully do. This sort of power is called a general power of attorney and should only be given to a very trusted person. The agent is however expected to be completely honest and loyal to his principal because he acts in a fiduciary position for the principal.

In a power of attorney, the duties of the agent are clearly spelt out and the agent must not do anything outside these duties. A common example is where a landlord/principal gives power to his agent to manage his property. He may give the agent the power to collect rents or to let out the property but not to sell the property. The agent can do all the things listed but cannot sell the property.

If the agent does any other act that is different from what is listed in the power of attorney, such act will be null and void and will be of no effect. The agent cannot go beyond his powers as stated in the power of attorney. If the principal intends to sell the property, he can then give the agent the power to sell the property on his behalf.

Although a power of attorney grants the agent the power to act in the absence of the principal, the power of attorney cannot grant powers that are contrary to the rules and regulations guiding people and companies that the agent deals with. For example, if a bank has rules that require the principal to be physically present in the bank to perform certain actions, the power of attorney cannot grant the agent the power to perform those actions in the absence of the principal.

The agent can be a spouse, adult child, relative, or trusted friend of the principal, as long as he acts in good faith on behalf of the principal at all times. It should be noted that the actions of an agent are legally considered to be those of the principal, so the principal should always choose a trustworthy person. This is especially important because it is very easy for the agent to misuse his power. Generally, not having a power of attorney is better than having one that gives power to someone that the principal does not trust.


A power of attorney can either be revocable or irrevocable.

A revocable power of attorney is one in which the principal can revoke or withdraw the powers given to the agent and this can be done in any of the following circumstances:

  • A power of attorney may be revoked once the purpose for which it was created has been fulfilled. The purpose should have been stated in the power of attorney. This means that once the agent carries out all the powers and duties he was required to do, there is nothing left to do, so the power of attorney is automatically revoked.
  • The principal may wish to bring to an end the duties of the agent. He does not have to seek the consent of the agent but should make the agent aware of his decision.
  • Also, if the purpose of the power of attorney is illegal or does not fulfill the purpose for which it was created, then the principal would be forced to revoke the power. 
  • If the principal dies, becomes insane or bankrupt, the power of attorney is automatically revoked by law.
  • It can also be revoked if the agent does not wish to continue to act as an agent of the principal.

An irrevocable power of attorney is quite different. This is where the agent gives the principal an agreed and acceptable commitment or consideration for the period of the power of attorney. Where this is the case, the power of attorney cannot be revoked until the commitment or consideration has been completed. If the principal goes ahead to revoke the power of attorney before the consideration expires, the agent can sue the principal. This type of power of attorney protects the agent.

With an irrevocable power of attorney, the principal gives the agent the power to act exclusively on his behalf. This gives the agent exclusive authority to act and the principal cannot get out of the agreement without the consent of the agent. An instance where an irrevocable power of attorney is granted is where the principal wants to sell his assets, such as stocks or bonds.

A power of attorney can only be used according to what is stated in it. If the agent steps outside the boundaries of his authority, he would be responsible for any damage or loss which the principal may suffer. Also, the powers given under a power of attorney cannot be transferred or delegated to another person except if it is stated in it. The power of attorney becomes effective as soon as the principal signs it, unless the principal states that it is only to be effective where a future event takes place.