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The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of a lawyer or you may directly contact and consult Alburo Alburo and Associates Law Offices to address your specific legal concerns, if there is any.
Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
For an SPA to be valid and enforceable, the authority granted must be clear, express, and specific, and the agent must act strictly within the scope of the powers conferred by the principal.
A Special Power of Attorney (SPA) is a written instrument whereby a principal grants authority to an agent (attorney-in-fact) to perform one or more specific acts on the principal’s behalf. Under Article 1878 of the Civil Code, special powers of attorney are necessary in the following cases:
- To make such payments as are not usually considered as acts of administration;
- To effect novations which put an end to obligations already in existence at the time the agency was constituted;
- To compromise, to submit questions to arbitration, to renounce the right to appeal from a judgment, to waive objections to the venue of an action or to abandon a prescription already acquired;
- To waive any obligation gratuitously;
- To enter into any contract by which the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration;
- To make gifts, except customary ones for charity or those made to employees in the business managed by the agent;
- To loan or borrow money, unless the latter act be urgent and indispensable for the preservation of the things which are under administration;
- To lease any real property to another person for more than one year;
- To bind the principal to render some service without compensation;
- To bind the principal in a contract of partnership;
- To obligate the principal as a guarantor or surety;
- To create or convey real rights over immovable property;
- To accept or repudiate an inheritance;
- To ratify or recognize obligations contracted before the agency;
- Any other act of strict dominion.
While SPAs are commonly used in personal, commercial, and property transactions, they may become ineffective or unenforceable if:
- The SPA does not contain a clear authority for the act performed;
- The act performed is one that requires a notarized or authenticated SPA, and the document lacks such formality;
- The SPA is revoked, the principal becomes incapacitated, or the agent acts in bad faith; or
- The SPA is used to circumvent statutory prohibitions or public policy, in which case the unauthorized act produces no effect on the principal.
Hence, although an SPA allows another to act on one’s behalf legally, its enforceability depends on formal execution of requirements, good-faith exercise of the authority granted, and strict compliance with the Civil Code.
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Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding legal services, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/ 09175772207/ 09778050020.
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