Written by Benjamin Kingsley
Do you have questions about or need assistance with a power of attorney? Please click here to email us at contact@legalandme.com.
Do you need a power of attorney form? We make a do-it-yourself power of attorney: finance power of attorney or healthcare power of attorney.
When considering whether a principal can revoke a contract signed by an agent under a power of attorney (POA), it is important to understand that the answer is not always straightforward. In general, a principal may have the ability to revoke certain contracts entered into by their agent, but this power is not absolute and depends on several factors.
As a general rule, a principal can revoke a power of attorney at any time, which would terminate the agent’s authority to enter into new contracts on the principal’s behalf. However, revoking the POA does not automatically invalidate contracts that were already signed while the POA was in effect. The validity of these contracts depends on various circumstances and legal principles.
It is crucial to note that some contracts signed by an agent under a valid power of attorney will remain binding on the principal, even if the principal later attempts to revoke them. This is particularly true for contracts entered into with third parties who acted in good faith and had no knowledge of any limitations on the agent’s authority. The doctrine of apparent authority protects innocent third parties who reasonably relied on the agent’s apparent power to act on behalf of the principal.
Contracts that are likely to remain valid despite a principal’s attempt to revoke them include:
1. Contracts with third parties who were unaware of any revocation or limitation of the agent’s authority
2. Contracts that have already been fully executed or substantially performed
3. Contracts where the third party has detrimentally relied on the agreement
4. Contracts that involve irrevocable commitments or have specific non-revocation clauses
However, there are situations where a principal may successfully revoke or invalidate a contract signed by their agent. These circumstances may include:
1. Cases where the agent exceeded their authority under the POA
2. Instances of fraud or misrepresentation by the agent
3. Situations where the third party was aware of limitations on the agent’s authority
4. Contracts that violate public policy or are otherwise illegal
It is important for principals to understand that attempting to revoke a contract signed under a valid power of attorney can be legally complex and may lead to potential litigation. Principals should consult with an experienced attorney to evaluate their specific situation and determine the best course of action. Additionally, principals should promptly notify all relevant parties in writing if they choose to revoke a power of attorney to minimize the risk of unauthorized actions by the agent.
Do you have questions about or need assistance with a power of attorney? Please click here to email us at contact@legalandme.com.
Do you need a power of attorney form? We make a do-it-yourself power of attorney: finance power of attorney or healthcare power of attorney.