Definition and Concept of General Authorization
The general authorization is a legal term, particularly relevant in German civil law, procedural law, and to some extent, in public law. It refers to the comprehensive right or far-reaching empowerment of a person to act on behalf of another person or organization in numerous different matters. In contrast to specific authorizations, the general authorization does not only regulate individual, clearly defined legal transactions or certain fields of action, but typically covers almost all legally permissible actions and decisions that the principal could make themselves.
General Characteristics of General Authorization
Scope of Authorization
A general authorization is characterized primarily by its comprehensive nature. It grants the authorized person the right to act in all property-related and non-property-related matters that are permitted by law. However, there is a limitation in that highly personal legal transactions or non-transferable rights are regularly excluded from general authorization. These include, for example, marriage, the making of a will, or the exercise of strictly personal fundamental rights.
Types and Forms
- General Power of Attorney in Civil Law: The general power of attorney, as a form of general authorization in civil law, is particularly common. Here, it authorizes the agent to carry out all transactions and legal acts on behalf of the principal, as long as they are not legally excluded.
- General Authorization in Public Law: In certain areas of administration, a general authorization may grant official bodies or office holders certain comprehensive powers.
- Procedural General Authorization: In court and administrative proceedings, a general authorization can, for example, cover representation in all instances and types of proceedings.
Legal Basis and Regulations
In the German Civil Code (BGB)
German civil law does not provide for an explicit regulation of general authorization as a separate norm. The legal basis is primarily the legal concept of power of attorney according to §§ 164 ff. BGB. A general power of attorney, as a form of general authorization, is a particularly broadly formulated authorization. However, it is subject to the general statutory provisions concerning the scope, exercise, and revocation of a power of attorney.Important Restrictions:
- Persons incapable of contracting and those with limited legal capacity cannot grant an effective general authorization, see §§ 104 ff. BGB.
- Highly personal transactions are excluded from general authorization, as they may only be undertaken by the individual concerned.
In Guardianship Law
In the context of guardianship law (§§ 1896 ff. BGB), a general authorization can typically exist through a guardianship directive or a precautionary power of attorney, with the welfare of the person under guardianship always taking precedence. Here, a general authorization for the guardian applies only to ordinary legal transactions; special or particularly consequential actions often require court approval.
In Commercial and Corporate Law
Prokura (§ 48 HGB) is regarded in commercial law as a special form of general authorization. It authorizes the conclusion of almost all kinds of commercial transactions and is comprehensively regulated in the German Commercial Code (HGB). The procuration can only be conferred with an explicit declaration in the commercial register and is subject to statutory restrictions, for example with regard to real estate transactions (§ 49 para. 2 HGB).
In corporate law, managing directors and board members may, through instructions, be equipped with a de facto general authorization. The scope and extent are determined according to the provisions of company law and the respective articles of association.
In Public Law
In administrative law, general authorizations are found particularly in the context of organ and office holding. Here, certain authorities or office holders are granted general powers of action and decision, insofar as statutory provisions permit. The specific design and limitation arise from the respective special statutes and procedural rules.
Limits and Restrictions of General Authorization
Statutory Limitations
Even though general authorization is by nature particularly far-reaching, there are legal restrictions that limit its scope of application:
- Highly Personal Rights: Certain legal acts may, as a rule, only be carried out by the individual concerned, for example, marriage, making a will, or exercising voting rights in corporate decisions.
- Form Requirements: If a particular form is required for a legal transaction (notarial recording, written form), the underlying general power of attorney must fulfill this form requirement in order to be effective (§ 167 BGB).
- Abusive Application: The abuse of a general authorization can, according to § 138 BGB, lead to the nullity of the legal transactions carried out.
Control and Supervision
If a general authorization is exercised within the framework of a guardianship relationship or an organ representative capacity (managing director, board member), it is regularly subject to special control mechanisms, such as by the court, the register, or by internal supervisory bodies (advisory board, supervisory board).
Significance in Legal Practice
General authorization is of considerable importance in legal practice, such as in representing elderly or permanently ill persons, in corporate settings, and in associations and foundations. Drafting a general power of attorney requires great care and should set out in detail which actions are covered and which may be excluded.
Distinguishing General Authorization from Similar Institutions
General authorization must be distinguished in particular from the following legal instruments:
- Single Power of Attorney: Limited to specific legal transactions.
- Special Power of Attorney: Applies to a clearly defined matter or a specific period.
- Sub-Power of Attorney: Authorization that can be passed on by the authorized agent to third parties.
In commercial law, procuration should also be understood as a special form of general authorization, albeit with specifically regulated exceptions and formal requirements.
Literature and Further References
A more in-depth examination of general authorization can be found in the commentaries to the BGB as well as in specialist literature on guardianship and commercial law. In addition, relevant court decisions provide important guidance on practical handling and interpretation.
This legal presentation of general authorization provides a comprehensive overview of the topic, its classification within the German legal system, and the relevant special features and limitations.
Frequently Asked Questions
Who can grant a general authorization?
A general authorization can, in principle, be granted by any fully legally competent natural person. The requirement is that the principal is fully in possession of their mental faculties and thus able to understand the legal meaning and implications of the general authorization. Minors or persons lacking legal capacity are generally excluded, unless acting as legal representatives for others (e.g., parents for their child). Legal entities, such as limited liability companies (GmbHs) or stock corporations (Aktiengesellschaften), may also grant a general authorization if this is within their corporate purpose and carried out by the competent representative (e.g., managing director, board member). For partnerships, such as a community of heirs, all parties must agree to the granting of the power of attorney.
Does a general authorization need to be notarized?
Notarization of a general authorization is not legally mandatory in all cases, but it is strongly recommended, especially if the power of attorney includes far-reaching powers and is to include real estate or corporate transactions. For certain legal transactions, such as a property purchase, notarization of the power of attorney is mandatory (§ 164 ff. BGB in conjunction with § 311b para. 1 BGB). Moreover, notarization increases acceptance by banks, authorities, and courts and serves as protection against abuse since the identity of the grantor is verified. A privately written power of attorney may be sufficient in everyday legal dealings, but has no effect in some areas.
In which cases does a granted general authorization end automatically?
A general authorization usually ends automatically upon the death of the principal, unless the power of attorney was expressly formulated as transmortem or post-mortem. Likewise, the principal’s loss of legal capacity leads, unless it is a so-called precautionary power of attorney, to the expiration of the general authorization. Other automatic termination grounds include revocation of the power of attorney by the principal, the expiration of a term specified in the power of attorney, the occurrence of a dissolving condition, and completion of the specific transaction to which the power of attorney related.
What duties does an authorized person have when exercising a general authorization?
The authorized person is obliged to exercise the general authorization granted exclusively in the interests of the principal. This includes transparently documenting all measures taken and intended, and, upon request, providing information and accounting (§ 666 BGB). They must also follow the principal’s instructions and avoid any conflict of interest. In the event of damage caused by a breach of duty, the authorized person may be liable to pay damages under civil law. In the case of gross abuse, criminal consequences may also ensue (e.g., for embezzlement, § 266 StGB).
Which transactions can be excluded from a general authorization?
Although a general authorization can, in principle, cover all types of legal transactions, German law specifies certain transactions that are not valid or only valid under special conditions when carried out under a general power of attorney. These include highly personal legal transactions (e.g., marriage, making a will, adoption) and transactions requiring a particular form, for which the relevant power of attorney itself must meet formal requirements (e.g., real estate transactions without notarized power of attorney). Furthermore, specific business areas can be explicitly excluded in the design of the general authorization by the principal stating so in the document.
How can a general authorization be effectively revoked?
Revocation of a general authorization can, in principle, be effected at any time and without a specific form requirement, including orally, provided that no particular form has been agreed or is required by law (§ 168 BGB). However, it is always advisable in practice to provide written notice of revocation for legal certainty and evidentiary purposes. The revocation should be expressly communicated to the authorized person and all relevant third parties (e.g., banks, contracting parties). If the general authorization is notarized, ideally the revocation should also be notarized and reported in official registers (e.g., land register).
What risks are associated with granting a general authorization?
The main risk of a general authorization is that the authorized person may abuse the comprehensive rights of representation and carry out unwanted or harmful transactions in the principal’s name. This can particularly result in financial losses, liability claims, or criminal consequences for the principal. Careful selection of the authorized person, clear instructions, regular review, and, if necessary, limitation of the power of attorney are therefore advisable. Excluding (certain) transactions with clear wording in the general authorization can also help prevent abuse. Another risk is the acceptance of the power of attorney by third parties, especially if it is not notarized.
