A Power of Attorney may be described as an instrument by which one person (the Principal) authorises and empowers another (the Attorney) who is named in the instrument, to act as his attorney or agent, either generally or for some particular purpose. The relation thus created is one of agency and the law of Principal and Agent is to a large extent the law applicable to Powers of Attorney.

In its scope, the Power of Attorney may be special or general. A special authority is one that restricts the Attorney to a particular act or acts. A general authority empowers him to transact all matters connected with the Principal's affairs.  However, the nature and extent of the authority which is partly express and partly implied must be ascertained from the instrument itself.

PROPER EXECUTION

FIRSTLY the Power must be validly executed.

In terms of Section 85 of the Evidence Ordinance the Court will presume that every document purporting to be a Power of Attorney and to have been executed before and authenticated by a Notary Public or a person duly authorised by law in that behalf or any Court, Judge, Magistrate, or Ambassador; High Commissioner or other Diplomatic Representative of Sri Lanka, was so executed and authenticated.

A Power of Attorney to be valid, must be executed before and authenticated by a person mentioned above. In the case of a corporate body the document should be executed in the manner prescribed by the statutes, rules and regulations of that body for the purpose, e.g., Articles of Association in the case of a Company as provided in the Companies Act. The above requirements apply to any Power of Attorney, whether executed within or outside Sri Lanka.  The Powers of Attorney Ordinance provides for the registration of Powers of Attorney with the Registrar General. However registration is not essential for the validity of a Power of Attorney but the practice is to register it as Banks and Government Departments, refuse to act on a Power of Attorney unless the document is so registered.

POWER OF ATTORNEY MUST BE IN FORCE

 THIRDLY the Power of Attorney must be in force at the time it is acted upon.

 The Power of Attorney may have ceased to be in force by, inter alia, the death, lunacy or bankruptcy of the Principal or revocation by him.

 Therefore, when an Attorney signs for his Principal, he may be called upon to declare that the Power of Attorney under which he acts is still in force and that he has received no notice of revocation of the said Power of Attorney either by the death of his Principal or by any other means. It is desirable always to inspect the original Power of Attorney when a document is being signed under it.

DOES THE POWER COVER THE PROPOSED TRANSACTION?

 FOURTHLY the powers conferred upon the Attorney must cover the transaction which he wishes to enter into.

A Power of Attorney is always strictly interpreted and construed. The authority given is never extended beyond what is expressly given or necessarily implied. Every power intended to be exercised should, therefore, be conferred in express terms, which whether it be special or general, should carry with ft an implied authority to do all that is necessary and usual to carry ft into effect. For instance a power to demand and recover debts includes the power to sue for them and upon payment to execute proper receipts. A power to operate on an account includes the power to make deposits and withdrawals, but not to borrow on the account. Nor does a power to sell include authority to pledge. While a power to borrow may include authority to mortgage, a power to mortgage may not by itself extend to cover borrowing.

 Moreover, reliance should never be placed upon an ancillary clause, as it only confers such additional authority as is necessary to carry out the powers specially conferred.  (Eg. the words “and to do execute and perform any other act matter or thing…. In or about the business affairs of the Company” were held in a case not to give a power to borrow money on its behalf.)