Irrevocable power of attorney

what is irrevocable power of attorney

Irrevocable POA in common words is a power of attorney that cannot be revoked by the principal.

A power of attorney lapses for legal reasons (by operation of law) such as for mental incapacity or death. An irrevocable power of attorney will not lapse because it is continuing (enduring) and irrevocable, cannot be cancelled. An irrevocable power of attorney must say that it is irrevocable and it must be given for valuable consideration.

Irrevocable powers of attorney allow people to plan ahead for care and financial management in their old age by appointing an attorney or manager to act on their behalf if they become incapacitated. Some jurisdictions allow an irrevocable power of attorney to make decisions about medical treatment.

Unless the power of attorney has been made irrevocable, the grantor may revoke the power of attorney by telling the attorney-in-fact it is revoked. However, if the principal does not inform third parties and it is reasonable for the third parties to rely upon the power of attorney being in force, the principal may still be bound by the acts of the agent, though the agent may also be liable for such unauthorized acts.

Financial market using

Frequently, a shareholder cannot attend a general assembly meeting. He passes a proxy to another shareholder. A proxy is a power of attorney whereby one shareholder gives another the authority to speak in his name. The concept can be enlarged to include an irrevocable power of

attorney in which one shareholder grants a power of attorney to another and this power cannot be revoked. Such a legal concept could be utilized by a group of shareholders who grant an irrevocable power of attorney to a third to vote all shares in question in a certain fashion.

The irrevocable power of attorney is normally for short duration, the next general assembly. Contrary to its name, such powers of attorney in fact are not irrevocable, although an action in damages may lie for its cancellation. The irrevocable power of attorney is similar to a pooling agreement and a voting trust but far more temporal. Of course, it cannot have the diversity of use as a shareholders' agreement and is not a legal instrument particularly associated with international joint ventures.

Contract law using

Unless die principal has stipulated otherwise, an irrevocable power of attorney does not terminate in the event of the principal's death or by the principal being placed under curatorship. In the event of the principals insolvency an irrevocable power of attorney always terminates. Suspension of payment granted to the principal does not terminate a (revocable or irrevocable) power ot attorney. However, since suspension of payment has the effect that the principal cannot perform transactions without the cooperation of the administrator, the agent cannot do so either. An irrevocable power of attorney also terminates in the event of the agent's death, placement under curatorship or bankruptcy (unless the principal has provided otherwise).

Source: power-of-attorney.us

Category: Bank

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