We all must have come across various relations such as employer-employee, seller-his agent, etc., which all have their core idea or, in other words; basically, they all form part and parcel of Principal-Agent relations. They have their own terms and conditions while entering their contractual agreements. This is because, in all the above relations, one person acts on behalf of the other in order to ensure that the latter’s work or duty is complied with. In that way, we have other relations that we come across while doing contract law, banking law, Property, IPR, and even Insurance law. These laws are not exclusive but just an example. It is nothing but the relation through the Power of Attorney between Donee and Donor. This article will look into the general power of attorney and special power of attorney, including their differences, importance, and usage.

What are Powers-of-attorney?

In order to look into the types of power of attorney, it is important for us to know what power of attorney is. We refer to century-old legislation called the Powers-of-attorney act, 1882, which was later amended in the year 1968 and so on. The preamble of the act delivers the intention of the act, that is, to amend relevant laws concerning the powers of attorney. The only definition under the definition clause of the act defines the term powers-of-attorney. It does not define powers of attorney but includes any of the instruments empowering a specified person to act for and in the name of the person executing it. In essence, it is clear that Powers-of-attorney requires an instrument to enable a person to do an act.

Types of Powers-of-attorneys:

The above-mentioned powers of attorney shall be classified into two main categories. They are,

• General powers-of-attorney,
• Special powers-of-attorney.

Let us look at each type separately. General powers-of-attorney is the one where an instrument that is effectuated will be authorized by the principal for the purpose of doing a certain act in general on behalf of a person authorizing the instrument or executing it. In this, the word ‘general’ denoted the fact that the powers will be general in nature and not the general relating to the powers that the authority has with him in relation to the subject matter involved. If a lawyer or a firm is assigned to take care of the legal proceeding over the property issue, it is general in nature and does not mean the rights and powers over the property itself. If the subject matter involved is not general in nature, then that shall not come under the purview of General powers-of-attorney. That becomes limited powers of attorney.

Special powers-of-attorney, on the other hand, is when a principal executes the instrument and appoints the person to do the specific act mentioned by the principal himself. It completes once the specified act is over or has been completed by the person appointed.

These are the two main types of power of attorney.

Differences:

• Nature: In the case of General powers-of-attorney, as the name suggests, the powers are general in nature relating to that subject matter. Whereas in the case of special-powers-of-attorney, it is the act, and powers are specific in nature.
• Revocation: Both the powers of attorney shall be revoked by the principal on notice to the agent once the act is done or as they think fit. It shall be done mutually as well.

Purpose and Usages:

Both general powers of attorney and special powers have similar and different usages. It differs with the area of application. In order to look at the same, let us assume one hypothetical example. Let assume that Mr. A is the owner of various movable and immovable properties across the country. He further holds several interests in firms, corporate institutions such as companies, banks, associations, trusts, registered societies and has been holding the same as a partner, shareholder, beneficiary, owner, director, etc. In this case, let’s say that he is not residing within the respective country currently and cannot attend or cannot visit to manage his/her daily affairs of all those institutions. So, in this case, Mr. A can nominate or constitute or appoint any person authorized for the purpose of that affairs in general and has been residing in that area for his convenience currently or for in future activities that he may indulge in.

This nomination or appointment can be made through the execution of powers-of-attorney as an instrument. If he chooses to give General powers-of-attorney, then the powers shall be in general and not specific, as in the case of special powers-of-attorney. So, if executed then, the appointed person under the general powers-of-attorney can take care of all the activities and meetings, which Mr. A would generally do for all those things. This includes, with respect to caring property and related matters, legal proceedings, banking areas; insurance sector-related matters, representations, commercial acts such as shares, exchanges, company-related matters, etc. This is general in nature and includes general things and powers as the government would allow general and not specific powers.

On the other hand, if Mr. A specifically allows the powers to be exercised by the appointed person, then the exercise of power and binding of acts shall be only for those empowered areas and not general. If Mr. A appoints a person to execute and act on behalf of him through the special powers, then it is Special power of attorney. As discussed earlier, it is very limited and has more authority. Let’s say Mr. A appoints a legal firm for a court case, then it is specific to that case alone and ends after the completion. But, it involves activities on behalf of Mr. A.

Conclusion:

From a legal perspective, we should know that when a case has been instituted by the lawyer on behalf of the client, it is none other than the general powers-of-attorney executed by the client to the lawyer concerned. Vakkalatnama is the direct evidence for that purpose. Special powers of attorney are little important more than just general powers, as they must be binding on the principal more than what the agent will bear.