General Provisions Concerning the Authorization
An authorization is a legal act by which a legally competent principal, i.e. the assignor, authorizes his/her representative, i.e. the assignee, to conclude an agreement with a third person on behalf of the principal. Authorization has been regulated in the Contracts Act.
Granting a power of attorney is a practical way to authorize a person to act on behalf of the company. Witnesses are not necessary, but using them will support evidence in a dispute and is thus recommended.
An authorization can be granted by using:
a specified power of attorney on the basis of which the authorized person is granted the right to undertake a certain precisely defined legal act, e.g. to purchase a car for the company or
a general power of attorney on the basis of which the authorization covers a wider scope of legal acts, e.g. the representation of the company in certain legal proceedings (in the manner deemed most suitable by the authorized person) or
a full power of attorney in which case the power of attorney only contains the words “full power of attorney” (in Finnish: “avoin asianajovaltakirja”) and the assignor’s signature and the date.
In a business environment, an important form of authorization is also the authorization on the basis of a person’s position (implied authorization). The implied authorization is vested in a person, who according to law or common practice, is in a position in the company to which the legal capacity to undertake legal acts on behalf of the company is commonly connected. A client has a right to rely on the fact that a person working on the company’s premises has a right to undertake all measures, which are commonly considered to belong to his/her line of duties.
A written power of attorney is revoked by taking away the authorization document. If this cannot be done, it possible to appeal the general court for invalidation of the document. The implied authorization can on the other hand be revoked by removing the person from his/her position. Should the authorized person represent the company despite the cancellation of the authorization, the counterpart cannot refer to the action, if he/she knew about the cancellation.