Term and legal classification of “Power”
Definition and general meaning
The term “Power” originates from English and, in the broadest sense, means “authority,” “authorization,” “power of attorney,” or “strength.” In a legal context, the term is primarily used in civil law, company law, and international private law. It is utilized both in Anglo-American legal systems and in international treaties and documents.
Power in civil law
The power of attorney as legal “Power”
In German and European civil law, “Power” corresponds most closely to the power of attorney (§§ 164 ff. BGB). The power of attorney entitles the authorized person to act on behalf of the principal. A distinction is made between an internal power of attorney (granted to the agent) and an external power of attorney (granted to the third party).
Types of Power (power of attorney)
- General power of attorney: Comprehensive authorization covering all matters that can legally be delegated.
- Special power of attorney: Authorization for individual transactions or specific types of legal actions.
- Procuration (commercial law): Authorization governed by the German Commercial Code (§ 54 HGB) for conducting ordinary business transactions of a commercial enterprise.
Termination of Power (power of attorney)
The “Power” can expire for various reasons, such as due to:
- Revocation by the principal
- Lapse of time or occurrence of a terminating condition
- Completion of the relevant legal transaction
- Death or incapacity of the principal (note differing regulations in other jurisdictions!)
Power in the international context
Power of Attorney
In the Anglo-American legal sphere, especially under British and US law, a “Power of Attorney” is a legal declaration granting another person extensive representative authority. The terms and forms can differ significantly from those under German law.
Forms of Power of Attorney
- General Power of Attorney: Authorizes representation in all matters (comparable to a general power of attorney).
- Special Power of Attorney: Limited to certain acts/transactions only.
- Durable Power of Attorney: Remains effective even if the principal becomes incapacitated.
- Springing Power of Attorney: Only takes effect upon the occurrence of a certain condition (e.g., incapacity).
Form and proof
In international legal transactions, the validity and effectiveness of a Power of Attorney may require notarization, legalization, or apostille. This serves to ensure acceptance in foreign countries and internationally operating institutions.
Power in company law
Corporate Power
In company law, “Corporate Power” refers to the powers granted to the organs of a company (e.g., managing directors, boards) by articles of association and by law. It includes the authority of representation and management, which can be limited or extended by specific corporate provisions or the articles of association.
Authority of representation
- Stock corporation (AG): Board of directors (§ 78 AktG)
- GmbH: Managing director (§ 35 GmbHG)
- Partnerships: Representation by appointed partners (§§ 714 BGB, 125 HGB)
Liability issues
Exceeding Power (authorized competencies) can result in liability for the acting body, particularly in relation to the internal relationship with the company or, in case of violating statutory representative limits, also towards third parties.
Power in private international law
In private international law, “Power” is particularly relevant for the recognition of foreign powers of attorney and authorizations. Compliance with certain formal requirements of the issuing state’s law is often required as well as examination for acceptance in the receiving state.
Apostille and legalization
International documents and powers of attorney must often be provided with an apostille (Hague Convention) or legalized to be recognized and enforced abroad. This applies in particular to commercial transactions and company law procedures.
Power in contractual relationships
Drafting contracts
The granting of Power (authority of representation) should be clearly regulated in contracts. Especially in international business, detailed provisions regarding scope, restrictions, and termination of Power are of significant importance to ensure legal certainty.
Abuse of Power
The misuse of Power granted can lead to the invalidity of legal transactions and to claims for damages and rescission. In particularly serious cases, criminal consequences may also ensue (e.g., fraud or embezzlement).
Special features and distinctions
Difference from “Authority” and “Mandate”
In English, the terms “Authority” (competence in a broader sense) and “Mandate” (assignment) are also used. However, “Power” specifically refers to the legally granted authority of representation.
Distinction from actual power
Power in the legal sense must be differentiated from actual power (e.g., de facto influence without representative authority). Only legally conferred Power establishes binding legal effects towards third parties.
Summary
The term “Power” in a legal context refers to the authority for legal representation, particularly in civil, corporate, and international private law. The structuring, transfer, and termination of such authorities are of significant importance for legal certainty in national and international application of law. Clear structuring and verifiability of “Power” are central in daily practice for the effectiveness and enforcement of legal transactions.
Frequently asked questions
Who is authorized to make legally binding decisions regarding the use of electric power (“Power”) in a company?
The legally binding authority to decide on the use of electric power in companies typically lies with the bodies or representatives appointed for this purpose in accordance with the articles of association, statutes, or rules of procedure. In corporations such as GmbH or AG, these are usually the managing directors or board members. They are responsible for concluding energy supply contracts, commissioning energy suppliers, and complying with statutory requirements for power procurement and consumption. Where powers of attorney exist, authorized officers or agents may also enter into binding legal transactions regarding the use and procurement of electricity. In legal reviews, it is essential to check whether the representative bodies’ rules or internal competence allocations (e.g., within rules of procedure) have been observed. Furthermore, sector-specific or public law requirements (e.g., under the Energy Industry Act or Energy Security Act) may impact decision-making authority.
Which statutory provisions govern the billing and pricing of electricity in Germany?
The billing and pricing of electrical energy are subject to numerous statutory provisions, primarily from the Energy Industry Act (EnWG), the Electricity Grid Charges Ordinance (StromNEV), the Price Indication Ordinance (PAngV), and relevant EU regulations. The EnWG requires energy suppliers to provide non-discriminatory network access and transparency in the billing of services rendered. Prices and charges for household customers must be clearly and comprehensibly stated in accordance with the PAngV, taking into account key provisions regarding contract duration, notice periods, and billing procedures. There are also requirements for the allocation of taxes, duties, and statutory levies (e.g., concession levy, EEG levy up to 2022). The Federal Network Agency monitors and, if necessary, approves grid charge structures as well as intervenes in cases of abuse or unfair pricing by providers. In the event of a change of electricity supplier, § 20a EnWG regulates the prompt and consumer-friendly transition of billing procedures.
What applies from a legal perspective regarding power outages and liability for resulting damages?
For power outages and resulting damages, the provisions of the German Civil Code (BGB), especially § 280ff. BGB (damages due to breach of duty), as well as specific regulations from energy law, apply. Network operators and power suppliers are generally liable for damages only if caused intentionally or negligently (§ 18 Low Voltage Connection Ordinance, NAV). Liability is typically excluded when the event is unavoidable (force majeure, e.g., natural disasters) or by official order (§ 6 NAV). For brief supply interruptions within the so-called reasonable interruption tolerance, no compensation is generally owed. However, if, for example, lengthy, unannounced outages occur due to network operator misconduct, affected parties may be able to claim compensation for material and immaterial damages. In the area of product liability, manufacturers of technical components may be liable for consequential damages in the event of malfunctions.
What statutory obligations exist for companies concerning energy saving and improving energy efficiency?
Companies are subject to numerous statutory obligations to save energy and increase energy efficiency. Central is the Act on Energy Services and Other Energy Efficiency Measures (EDL-G), obliging large companies to conduct regular energy audits (§ 8 ff. EDL-G). Furthermore, the Energy Conservation Act (EnEG) and the Energy Saving Ordinance (EnEV) set requirements for business premises and technical systems concerning energy consumption. The revised EU Energy Efficiency Directive and the German Energy Efficiency Act (EnEfG) set further standards, such as obligations for operating energy or environmental management systems (e.g., according to DIN EN ISO 50001 or EMAS) for certain businesses. There are also obligations regarding reporting, including publishing energy performance indicators, transparency on consumption, and measures taken to reduce energy demand. Breaches of these obligations can result in fines or additional claims by the competent authorities.
What legal remedies are available to consumers in disputes with their electricity supplier?
Consumers have various legal remedies in disputes with their electricity supplier. Initially, there is the out-of-court route via the Schlichtungsstelle Energie e.V., which consumers can contact under § 111b EnWG to seek an extrajudicial settlement. This option must be offered free of charge, and the provider is obliged to participate in the process. If the arbitration procedure is unsuccessful, consumers may take legal action before the ordinary courts. The basis for civil claims is typically contract law (e.g., warranty rights due to defective electricity supply under §§ 280ff. BGB) as well as the law on Standard Terms and Conditions (§§ 305 ff. BGB) regarding inadmissible clauses. Additionally, complaints can be addressed to the Federal Network Agency or the consumer association, particularly if there are indications of systematic contract breaches or unfair business practices.
Are there special requirements for self-generation and use of electricity, for example by photovoltaic systems?
Yes, the legal framework for self-generation and use of electricity is manifold and includes, among others, the Renewable Energy Sources Act (EEG), the Combined Heat and Power Act (KWKG), and other energy and tax law provisions. Operators of self-generation systems (such as photovoltaic, combined heat and power units, etc.) must register their systems with the Federal Network Agency’s Market Master Data Register and comply with technical requirements for grid integration under § 9 EEG. For self-consumption, notification and any applicable contributions regarding the EEG levy are required (this no longer applies to small PV installations since 2022, but larger systems may still be partially subject to the levy). For tax purposes, feeding electricity into the grid may be considered a commercial activity, which can affect VAT, income tax, and possibly trade tax. Contractual agreements with the relevant network operator regarding connection and feed-in must be observed. In addition, there are obligations to record and document produced and consumed electricity as well as to ensure system safety under the Energy Industry Act.
