Limits of Authority and Legal Duration of a Power of Attorney

In many transactions, a power of attorney is signed to facilitate a specific procedure, and issuing it before a notary public is often viewed as sufficient to settle any legal obligation. Later on, unforeseen consequences may arise—an act carried out in the principal’s name beyond what was originally intended, or a transaction based on a power of attorney that is no longer legally valid.

In such cases, the issue does not lie in the notarization itself, but rather in the scope of the granted powers and the legal duration during which the power of attorney remains effective under UAE law.

What Is Meant by the Scope of Authority in a Power of Attorney?

The scope of authority refers to the legal framework that defines what the agent is permitted to do on behalf of the principal.
These powers are derived exclusively from the text of the power of attorney itself and may not be expanded through interpretation or analogy. The agent is strictly bound by what is expressly stated in the document, without addition or discretion.
Any act that falls outside this scope may be deemed unenforceable against the principal.

Legal Restrictions on the Exercise of Authority

The exercise of authority under a power of attorney is subject to mandatory legal restrictions, most notably:

• The agent must be of sound mind and over the age of 21.
• The agent may not appoint a sub-agent unless expressly authorized by the principal.
• A general power of attorney does not grant authority to sell real estate in Dubai unless such authority is expressly stated, pursuant to Article 929 of the UAE Civil Transactions Law.

Acts Requiring Special Authorization

The law clearly provides that certain acts are not presumed implicitly and require specific authorization to be legally valid, including:

• Sale or mortgage of real estate.
• Waiver of rights.
• Acknowledgment of debt.
• Settlement.
• Withdrawal or termination of legal claims.

Agent’s Liability for Exceeding Authority

If the agent carries out acts that exceed the authority granted by the principal in the power of attorney, this constitutes an excess of authority.

The consequences of such excess include:

• The act being considered legally invalid against the principal unless subsequently ratified by the principal.
• The agent bearing liability for the consequences and damages resulting from exceeding the granted authority.

The objective is to protect the principal from misuse of delegation while clarifying the legal effect of such acts on both parties.

When Does a Power of Attorney Legally Terminate?

A power of attorney terminates by operation of law in the following cases:

• Completion of the task for which it was granted.
• Expiry of the specified term of the power of attorney.
• Death of the principal or loss of legal capacity, unless the power of attorney relates to a third party’s right, except in cases of agency for the sale of mortgaged property.
• Death of the agent or loss of legal capacity, even if a third party’s right is involved; however, if there is a qualified heir or guardian, the principal must be notified accordingly.

Practical Examples of the Scope of Authority and Legal Duration

In practice, many situations arise where authority is exceeded or a power of attorney has expired, creating legal challenges, such as:

Case 1:
Fahad granted his friend a special power of attorney to sell a specific apartment in Dubai within three months. The sale was completed within the specified period, making the transaction lawful and valid as it complied with both the scope and duration stated in the power of attorney.

Case 2:
Sarah was granted a power of attorney to manage her father’s property-related transactions for six months only. After the expiry of this period, she attempted to continue handling certain matters. However, the law does not recognize any actions taken after the power of attorney has expired, meaning she was no longer legally authorized to act on her father’s behalf.

Case 3:
Ahmed granted his brother Karim a power of attorney to manage his bank accounts and pay monthly bills. Karim later attempted to use the same power of attorney to sell Ahmed’s car. This act was unlawful, as such authority was not expressly granted in the power of attorney.

The Role of the Notary Public in Regulating Authority and Duration

The notary public plays a crucial role in protecting both parties to the power of attorney by:

• Ensuring that the principal understands the scope of the delegated authority.
• Confirming the agent’s acceptance of the granted powers.
• Recording all details clearly to avoid ambiguity.
• Verifying the accuracy of the drafting, which helps reduce future errors that could lead to disputes.
• Ensuring the power of attorney is accepted by official and private entities.

Frequently Asked Questions on the Scope of Authority and Legal Duration

Can a specific duration be set for a power of attorney?
Yes. The principal may set a specific duration, and the power of attorney automatically terminates upon expiry of that period.

Can a power of attorney be revoked before its expiry?
Yes. It may be revoked at any time unless it was issued in the interest of the agent or a third party, provided that revocation follows the prescribed legal procedures and the relevant authorities are notified.

Does a power of attorney without a specified duration remain valid indefinitely?
No. A power of attorney without a specified duration remains valid only until a legal cause for termination arises, such as revocation, death, or completion of its purpose.

Does the duration of a power of attorney vary depending on the type of transaction?
Yes. The duration may vary depending on the nature of the transaction and the competent authority, as some authorities require a recently issued power of attorney to complete certain procedures.

In conclusion, understanding the scope of authority and the legal duration of a power of attorney is essential to protecting the rights of all parties and ensuring the validity of legal acts. Issuing a power of attorney before a notary public, with clearly defined powers and duration, remains the legally sound approach under UAE law.

For trusted legal advice on the scope and duration of powers of attorney, contact Private Notary in Dubai via the WhatsApp button at the bottom of the page.

Private Notary Dubai
Mobile: +971 56 232 7778
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Email: info@privatenotarydubai.ae
Address: Office No. 805, Opal Tower, Business Bay, Dubai, UAE