In today's modern economy, globalization has caused a massive expansion in trade and industry, and has normalized the need to hire agents to act on behalf of an individual or a company in a new jurisdiction. This has resulted in a level of uncertainty with regards to people's understanding of the laws and regulations, which govern an agency agreement, and the documents necessary to create this relationship in a legally sound manner.

A power of attorney is the first legal document wherein the principal assigns an agent to act on his behalf broadly, or to take a limited set of decisions on his behalf.  The powers of the agent herein will therefore differ according to what is granted to him by the principal, regardless of whether the document is titled a "comprehensive power of attorney", "general power of attorney", or "private power of attorney".

It is a common misconception that an agent has an absolute right to use the powers granted to him in the agency agreement, however, the law also regulates the responsibility of the agent, and makes him accountable to the principal for his actions. An agent's primary role is to act with due care when implementing the agency, in addition to submitting a report to the principal notifying him of every action performed, and to balance amounts due to the to him.

Most importantly, the agent's action must reflect the principal's will, since two types of liability may arise. On the one hand, civil liability shall arise if the agent violates the principal's will, and on the other hand, criminal liability shall arise if the agent falsifies that will.

We refer below to one of the cases, in which the court convicted the agent for breach of trust, even though he was granted a power of attorney that permitted him to sell to others, and he made said sale in accordance with the power of attorney issued to him, and the principal's will. In this instance, the court decision was to imprison the agent, since he had not delivered the sale value to the principal, and therefore, did not abide by his role as an agent.

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With the above in mind, this article aims to shed light on the gravity of delegating others to act on your behalf through an agency agreement and power of attorney. All delegated powers should therefore be precisely defined to protect the principal and avoid future disputes from arising.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.