In a world where interests intertwine and procedures grow increasingly complex, the Power of Attorney (POA) remains one of the most effective—and sensitive—legal tools. It is a written relationship of trust that grants another person the authority to act on your behalf. But to what extent?
Here lies the most important question: What are the powers of a Power of Attorney, and what are its legal limits?
In this comprehensive guide, we simplify all the details in accordance with the laws applicable in the United Arab Emirates. Read carefully to fully understand your rights and protections.
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What Is a Power of Attorney Legally?
A Power of Attorney is a legal contract whereby one person (the principal) authorizes another person (the agent) to carry out specific legal acts on their behalf.
The UAE Civil Transactions Law governs POAs and establishes a fundamental principle:
An agent has only the powers expressly or implicitly granted in the POA.
In other words, the wording of the POA is not mere formality—it defines the boundaries of authority.
What Is Meant by “Powers of Attorney”?
The powers of attorney define the legal framework that determines:
- What the agent is allowed to do
- What the agent is prohibited from doing
- The legal effects of the agent’s actions
These powers are the cornerstone of any POA. Any تجاوز (excess) may expose the agent to legal liability and may invalidate the act itself.
Types of Powers of Attorney and Differences in Authority
Each type of POA grants specific powers, as outlined below:
1. General Power of Attorney
Grants broad authority to manage the principal’s affairs, such as:
- Legal matters: Representing the principal before courts and government entities, submitting memoranda, settling disputes, appointing lawyers or employees, and signing correspondence related to delegated matters.
- Commercial activities: Establishing companies, managing assets, and signing contracts (excluding real estate unless explicitly authorized).
- Financial transactions: Receiving funds and signing financial documents.
- Property management: Managing financial or business-related assets (distinct from selling real estate).
2. Special Power of Attorney
Granted for a specific and clearly defined purpose, such as:
- Selling a specific property
- Completing a specific transaction
- Legal representation in a particular case
This type is the safest because its limits are clear and leave no room for interpretation.
3. Litigation Power of Attorney
Used before courts and clearly defines the lawyer’s authority regarding:
- Filing lawsuits
- Appeals
- Settlement or waiver of claims
4. Administrative or Commercial Power of Attorney
Common in corporate settings, used to manage daily operations without affecting ownership or sovereign decisions.
What Does a Power of Attorney Allow?
This depends on the wording of the POA, but generally it may allow:
- Representation before official authorities
- Signing documents
- Following up on government transactions
- Managing specific financial matters
- Legal representation of individuals or companies
In short: what is explicitly stated is permitted—what is not stated is prohibited.
What Is an Agent Legally Prohibited from Doing?
Even with a general POA, and pursuant to Articles 927–929 of the UAE Civil Transactions Law, an agent may not:
- Sell or mortgage property without explicit authorization
- Waive essential rights
- Make donations from the principal’s funds
- Delegate authority to others (sub-agency) without written permission
- Act in a personal interest that conflicts with the principal’s interest
Any act beyond these limits is considered an excess of authority.
Legal Powers and Responsibilities of an Agent Under UAE Law
Under UAE law:
- The agent must act in good faith
- The agent must adhere to both the letter and spirit of the POA
- The agent bears liability for any damage caused by negligence or overreach
The agent is treated as a trustee, not an owner.
Powers always come with responsibilities, including:
- Precise execution of the task
- Protecting the principal’s interests
- Avoiding misuse of authority
- Providing accounts upon request
- Not exceeding the scope of authority
Failure to comply may result in:
- Invalidation of the act
- Civil liability
- Financial compensation
When Is an Agent Considered to Have Exceeded Authority?
An agent is deemed to have exceeded authority if they:
- Act outside the scope of the POA
- Use powers for personal gain
- Ignore the principal’s instructions
- Perform acts prohibited by law
In such cases:
- The principal is not bound by the act
- The agent bears full responsibility
If the principal later expressly ratifies the act, it may become legally valid. Without such ratification, the act remains unenforceable against the principal.
How Can I Define an Agent’s Powers Clearly?
The principal has the right to revoke a POA at any time without stating reasons, unless a legal provision requires otherwise. However, revocation is not automatic and requires:
- Formal written notification to the agent
- Notification of relevant authorities if the POA relates to official or commercial matters
Under UAE law, a POA terminates in the following cases:
- Death of the principal or the agent
- Loss of legal capacity of either party
- Completion of the purpose for which the POA was issued
Can an Agent Grant Another Power of Attorney (Sub-Agency)?
It is a common misconception that an agent may delegate authority freely. In reality, an agent may not appoint another agent unless this right is explicitly stated in the POA.
Example:
If an agent is authorized to represent you legally, they may not transfer this authority to another person without your written consent.
Any unauthorized sub-delegation may be unlawful and expose all resulting acts to legal challenge.
How Can You Protect Yourself as a Principal?
To avoid disputes or contradictions, follow these key tips:
- Clearly and precisely define the powers granted
- Specify the duration and limits of the POA
- Rely on a licensed legal advisor to draft the POA
- Review the POA periodically to ensure it still reflects your needs
- Inform the agent of any changes or amendments to authority
Frequently Asked Questions (FAQs)
What are the powers of an agent under a general POA?
They include broad management and representation powers, excluding fundamental acts unless explicitly authorized.
What can an agent not do legally?
An agent cannot sell, mortgage, waive rights, or donate without clear authorization.
Can an agent sell property without explicit permission?
No. Such a transaction is legally invalid.
What is the difference between a general and a special POA?
A general POA covers management broadly, while a special POA is limited to a specific purpose.
How do I define an agent’s powers?
Through clear, specific, and detailed drafting of each clause.
Can the limits of a POA be exceeded legally?
Yes, only through explicit subsequent approval by the principal.
When is an agent considered to have exceeded authority?
When acting outside delegated powers or harming the principal’s interests.
Conclusion
The powers of attorney are not merely written words—they are legal boundaries that must be respected. The clearer the POA, the safer the relationship and the lower the risk of disputes.
Under UAE law, a Power of Attorney is a trust.
Those who understand its limits protect themselves and their rights with confidence and legal precision.
If you need legal guidance or professional assistance in drafting an optimal POA, contact us to ensure you remain on solid legal ground.