“Delegating for better management” is often accurate. Whether it’s a simple signature delegation or a complete delegation of powers, this practice can be convenient but also risky. Here’s a brief overview of what the law provides in this regard.

Choosing the right “weapon”: 

According to Article 879 of the Law of Obligations and Contracts (D.O.C.), “The mandate [in its general sense] is a contract by which one person authorizes another to perform a lawful act on behalf of the principal.” However, delegation can and should take different forms depending on the situation at hand.

Signature delegation or “special mandate”: 

Commonly known as “power of attorney,” this document allows a signatory to delegate the ability to sign on their behalf. This doesn’t imply making the decision to sign but rather the act of signing within a specific limited operation. This type of authorization is widely used in legal procedures, for example.

Power delegation or “general mandate”: 

More commonly known as a “mandate,” this resembles a delegation of the right to “decide.” It’s a broader form of delegation but still comes with certain necessary limitations (see rules below). An example is when a shareholder delegates a third party to manage the company.

General legal rules:

 Delegation follows common law rules regarding the delegate, the delegator, and the delegation itself. Some pertinent rules to note include:

• • Delegator level: For the mandate/power of attorney to be valid, the delegator must be able to sign/make the said decision themselves. This is termed “capacity.” For instance, only the owner of a property can delegate the power to administer/sell it.
  • Delegate level: The delegate can perform acts on behalf of the delegator, even without the capacity to do so themselves. The law only requires that they have “discernment and mental faculties.”

• Delegation level:

• • The delegator must clearly establish the extent and limits of the delegated authority, or else their liability might be involved for acts performed beyond the granted powers.
  • Some acts are not delegable, as listed in Article 894 of the same code.
  • The object of the delegation cannot be impossible to achieve or too broad, nor can it involve actions contrary to the law and morals.

Delegations involving property transfer must be established through an authentic act with a lawyer/notary, as specified in Law 39-08 related to the code of real rights. Any power of attorney that doesn’t meet these standards is considered null.

Explore the entirety of rules, procedures, and effects of mandates in the Law of Obligations and Contracts, Articles 879 to 958.

For more information, seek advice from our team of experts.