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Conditions for Cancelling Power of Attorney for Sale for Self or a third Party

A case held by our office

A power of attorney for sale can be granted to sell something on behalf of someone else, whether this benefits the agent themselves (self-sale) or  a third party (sale for others). 

According to the law, a general agency does not specify the powers of the agent except for administrative tasks, and the principal can cancel or limit the agency at any time, even if there is an agreement that contradicts this.

Regardless of whether the agency is issued to benefit the agent or a third party, the principal cannot terminate or limit the agency without the consent of the issuer. The “interest” in this context, refers to any benefit that accrues to the agent, or the third party from the continuation of the agency relationship, and must be clearly and unequivocally disclosed in the agency contract. The burden of proof of this interest lies with the agent, who must provide supporting evidence.

In the legal case outlined below, a piece of land was sold to a buyer via a sale contract, accompanied by a power of attorney issued by the seller. The power of attorney authorized the buyer to sell the land for themselves, or on behalf of others and expressly stated its irrevocability, except by mutual agreement. Despite this, the buyer failed to abide by certain provisions of the contract, resulting in the court’s ruling to invalidate both the sale contract and the power of attorney.

The court stated that the power of attorney was granted to the buyer for their benefit, on the basis of a sale contract that had been rescinded. Consequently, the agent no longer had any stake in maintaining the power of attorney. It is worth noting that the power of attorney is not considered an independent contract but rather part of the sale contract that is concluded between the seller and the buyer and which revolves around it. When the sale contract is canceled, a request to terminate the agency can also be made from either of the contracting parties who violated their obligations.

To conclude, The purpose of this article is to emphasize the importance for individuals who act as agents or principals to fully understand the conditions of the agency and the resulting interests, which must be clearly stated in the power of attorney contract. When the contract is terminated, the power of attorney must also be terminated through a request from any of the contracting parties. The above underscores the importance of drafting and documenting contracts properly to avoid disputes and conflicts in the future.

Should you have any further questions about this legislation, please feel free to reach out to one of our legal experts.

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Written By

Noor Mahdy - Attorney at Law

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