There may be situations where you want to appoint someone else to do certain tasks on your behalf. For example, you might want a family member to enter into a contract for you, or you may ask your tax agent to handle certain finances on your behalf.
When this happens, you may want to look into an Authority To Act Form. An Authority to Act Form allows you to appoint someone to act on your behalf, and should set out the roles and responsibilities of the agent and principal. It should also clarify any ambiguity around the scope or purpose of the action required.
Put simply, you’re giving permission for someone to make certain decisions for you, and you put this all in writing.
What About A Power Of Attorney?
You might be thinking, ‘How is this any different to a Power of Attorney?’
The key difference here is that a Power of Attorney is an official legal document which allows you to appoint someone to act on your behalf for an ongoing period of time (subject to the terms in the agreement, of course), whereas an Authority To Act Form is usually only applicable to one situation.
For example, if you want a friend to enter into a contract on your behalf, but it is a one-off task, then you’d opt for an Authority To Act Form. However, if you want this friend to enter into all contracts for you for an ongoing period of time, a Power of Attorney would be more suitable.
Why Do I Need An Authority To Act Form?
If you are authorising an individual or another business to act for you, it’s important to have a legal document in place to outline the rights and responsibilities of each party.
It should set out the limits and scope of the conduct agreed upon, so you can avoid any confusion or issues later down the track. For example:
- What task are you asking them to do?
- What is the scope of the task?
- What will happen if the person can’t complete the task?
It’s also important to note that the Authority to Act Form does not replace a full agreement. Rather, it should be used in conjunction with another service agreement where the authority to act is an important aspect of the service offering.
For example, you might use this form to allow a tax agent to sort out your finances for you. In this case, it is appropriate to have one in place as it will be used in conjunction with an existing service agreement with your tax agent.
Who Can I Appoint?
The rules around who you can actually appoint aren’t very strict, as long as they are a ‘trusted person’. You can choose a family member, friend or an agent (someone you have a fiduciary relationship with).
Remember that you can also appoint a business to act for you.
Like a Power of Attorney, an Authority To Act Form will generally give rise to an agency relationship. This also means that a fiduciary relationship will fall into place, with a number of duties to be aware of.
This is because you are appointing someone to act on your behalf, so a number of responsibilities arise here. For example, a real estate agent and their client will have an agency relationship, which you can read more about here.
In any agency relationship, the arrangement is subject to certain conditions and rules, such as:
- Duty of care, skill and diligence
- Duty to avoid any conflict of interests
- Duty to act in the best interests of the principal
- Duty to not engage in acts that go beyond the scope of the agreed activities or conduct
- Duty to reimburse the agent for expenses incurred in relation to the agreed conduct
So, if you’re in an agency relationship, it’s important to understand how you can meet these duties and responsibilities in light of the nature of your work.
Do I Need An Agency Agreement?
You don’t necessarily need an Agency Agreement if your circumstances automatically give rise to one. So, if you have a Power of Attorney or Authority To Act Form in place, you may not need to have a separate agreement in addition to this. But of course, this depends on your specific situation.
Generally speaking, an agency relationship can arise based on your circumstances or necessity.
Our lawyers will draft an Authority to Act Form tailored to the requirements of your business.
Within our package, you’ll get a consultation with one of our lawyers who will get to know a bit more about your business, take your instructions for the project and advise you on the legal issues you need to know.
If you’re ready to get an Authority to Act Form drafted for your business, Sprintlaw has friendly and experienced lawyers that can help you through the legal processes involved!
If you would like a consultation on your options going forward, you can reach us at 1800 730 617 or email@example.com for a free, no-obligations chat.
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