Imagine your managing director is unexpectedly ill and important contracts need to be signed today. Who is authorized to sign in such cases? In the business world, it is common for people to sign on behalf of others. However, this is only possible if certain legal requirements are met.
In day-to-day business, it is often necessary for one person to sign for another. This may be necessary for various reasons, such as absence, illness or a heavy workload for the decision-maker. In principle, any person with legal capacity can sign on behalf of another person, provided they are authorized to do so. This authorization is usually granted by a written or verbal power of attorney.
In this article, you will learn everything you need to know about signing on behalf, the different types of power of attorney and their legal basis. We explain the differences between the abbreviations i.A. (on behalf of), i.V. (with power of attorney) and p.p.a. (per procura autoritate), give practical tips on how to use them correctly and use case studies to show the legal consequences of misuse.
However, before we dive into the details of i.A., i.V. and p.p.a., it is important to understand what a power of attorney is and why it forms the basis for these abbreviations. A clear knowledge of the legal framework and the meaning of power of attorney will help to correctly understand and apply the use of these abbreviations.
A power of attorney is the legal authority that enables a person to act and make decisions on behalf of another person. This authority is granted by means of a unilateral declaration of intent requiring receipt (only becomes effective upon receipt by the correct recipient). This means that the power of attorney is granted by the principal or recorded in writing and accepted by the proxy holder. In practice, the written form of power of attorney is always preferable, as it is clearly documented and easier to prove.
Why is a power of attorney important? A power of attorney is essential if someone is to sign contracts or make decisions on behalf of another person. It ensures that the representative acts within the legal framework and that their actions are legally binding. Without a power of attorney, both parties risk legal uncertainties and possible liability claims.
For one person to act on behalf of another, a valid power of attorney must be in place. This can be issued verbally or in writing, whereby the written form is preferable for reasons of proof. A verbal power of attorney is more difficult to prove and can be problematic in the event of a dispute.
If there is no power of attorney, the representative is personally liable for the actions he or she has taken on behalf of the represented party. This is regulated in § 179 BGB. If the represented party refuses to approve the agreement, the agreement becomes invalid. This means that the agreement does not create any legal obligations and is treated as if it had never been concluded.
Private autonomy of the represented party: Private autonomy, the right of each individual to determine their own legal relationships, is respected. The represented party decides whether or not to approve the agreement. He is not forced to accept a contract that he does not wish to approve.
In accordance with Section 179 (1) BGB, the representative without power of representation is personally liable to the contractual partner. This means that the representative must fulfill the contract or pay damages if the represented party refuses to give permission. However, this liability does not apply if the contractual partner knew or should have known that the representative had no power of representation.
Certain legal transactions, such as marriage or making a will, cannot be carried out by a representative. These must be concluded in person and are not subject to the power of representation.
Overall, an understanding of the power of attorney and its legal basis forms the foundation for secure and legally binding representation in business life. It protects both the represented party and the representative from legal pitfalls and ensures clear and transparent action.
It is now crucial to choose the correct abbreviation when signing the order. The abbreviations i.A., i.V. and p.p.a. each have specific meanings and areas of application that clarify what type of authorization the person signing has.
If you sign on behalf of another person, always use your own name and put the corresponding abbreviation in front of it. This makes it clear to the contractual partner that the contract is being concluded with the person represented, not with you as the signatory. This is necessary in accordance with Section 164 of the German Civil Code (BGB) to ensure the legal validity of the agreement.
Example: Max Mustermann, on behalf of Maria Schmidt
The abbreviation "i.A." stands for "on behalf of" and is used when someone carries out specific tasks or transactions on behalf of another person. It indicates that the action is being carried out in response to a specific instruction and not on one's own initiative. This type of signature is typical in situations where a quick decision is required and the principal is not available, for example in the event of illness or absence.
Example: ABC Software GmbH has to conclude a maintenance contract with DEF AG. Ms. Meier, head of the customer service department, has checked the contract but has gone into a meeting at short notice. She instructs her assistant, Mr. Schulz, to sign the contract on her behalf.
Legal consequences: If a person exceeds their authority when signing on behalf of someone, this can lead to civil legal action. Particularly serious cases involving fraudulent intent may also result in criminal prosecution.
The abbreviation "i.V." means "with power of attorney" and indicates that the person signing has broader authorization to act on behalf of another person or company. This power of attorney allows the acting person to make decisions and conclude transactions independently as long as they remain within the defined limits of the power of attorney. Typically, "i.V." is used by people who regularly act on behalf of others, such as department heads or managers.
Example: A head of department can sign contracts and make important decisions as long as they are within the scope of his or her authorization.
Situation: ABC Handels GmbH is working on a large construction project "New office building". Two contracts need to be signed as part of this project:
Ms. Müller is the assistant to the management and has an "i. V." power of attorney, which authorizes her to sign contracts up to a value of EUR 50,000.
Specifically:
"p.p.a.", stands for "per procura autoritate" and is used in commercial law to indicate that the signatory has a special power of attorney, the Prokura. This comprehensive authority allows the person to carry out all judicial and extrajudicial transactions on behalf of the company. The power of attorney must be entered in the commercial register and applies to all business activities, with certain exceptions such as the sale or encumbrance of real estate, which require separate powers of attorney.
Restrictions: The procuration is not transferable and the procurator may not grant any further procurations. An authorized signatory can make far-reaching decisions and conclude contracts, but certain actions, such as the dissolution of the company, require additional approvals.
Example: An authorized signatory can take out company loans, encumber properties or sue in legal matters, but he cannot sell real estate without additional authority.
Situation: Mr. Schmidt, the authorized signatory of ABC Handels GmbH, is responsible for the "new office building" construction project. Due to his power of attorney, which grants him comprehensive authority to act within the scope of the commercial business, he can make far-reaching decisions independently.
Specifically: Mr. Schmidt can sign a contract for the purchase of construction cranes worth 500,000 euros. His power of attorney allows him to conclude such important contracts without consulting the management, as the power of attorney confers extensive powers entered in the commercial register.
The power of attorney cannot be transferred to Ms. Müller in the event of Mr. Schmidt's absence. The power of attorney is personal and may only be exercised by the authorized signatory himself.
Understanding and correctly applying the notation i.A., i.V. and p.p.a. are essential for legal clarity and certainty in business transactions. These abbreviations define the nature and scope of the representation and ensure that the action takes place within the legal framework. By knowing which abbreviation to use when, you can ensure that your actions or those of your counterpart are legally secure.
Powers of attorney can be granted directly to a person or regulated as an internal power of attorney within a company. The latter ensures that employees in certain positions can carry out legal transactions. This can be linked to the position and can be carried out according to the single or dual control principle, so that someone can witness the granting. This avoids the need to grant separate powers of attorney to each individual employee or to revoke them when positions change. It is important that each power of attorney is clearly defined and documented to ensure legal certainty.
The main power of attorney is the one granted directly by the represented party. A sub-power of attorney, on the other hand, is granted by the main authorized representative. The authorization to grant a corresponding power of attorney is determined by way of interpretation. A power of attorney can be granted for a limited or unlimited period of time (transmortal, postmortal).
1. special power of attorney
A special power of attorney is tailored to a specific legal transaction or a specific result and is earmarked for a specific purpose. It can include several actions that are necessary to achieve the objective. If a special power of attorney exists, contracts are usually signed with an "i.A.".
2. individual power of attorney
An individual power of attorney is limited to a business area or a specific activity, is valid for a specific transaction and then expires. It is earmarked for a specific purpose and is intended not just for a signature, but for the execution of a single important transaction. Even if an individual power of attorney exists, contracts are usually signed with an "i.A.".
3. generic power of attorney
A generic power of attorney is far-reaching and applies to all transactions of a certain type. It authorizes the conclusion of certain types of transactions. With a general power of attorney, contracts are usually signed with i.A..
4. general power of attorney
A general power of attorney allows the execution of all legal acts and transactions that usually arise in the commercial sector. It is often granted to managing directors of a GmbH and board members of an AG. In this case, contracts are usually signed with i.V.
5. procuration
A power of attorney is a comprehensive authorization that can only be granted by the owner or legal representatives of a company. It authorizes the execution of all judicial and extrajudicial transactions, with exceptions such as the sale of real estate and the dissolution of the company.
6. further powers of attorney: Power of attorney
A power of attorney allows employees to carry out legal transactions on behalf of a merchant in accordance with § 54 HGB. For reasons of proof, it should be recorded in writing and can be granted and revoked at any time by the authorized signatory or merchant himself.
Depending on the type of power of attorney and internal regulations, it can be signed with i.A. or i.V..
If it is clear which authorization is present, nothing stands in the way of signing, right?
Signatures are more than just a name on a piece of paper. They are legally binding and serve as proof of consent to the contents of a document. To ensure their validity and effectiveness, signatures must follow certain guidelines.
A signature generally has the function of a declaration of intent. It ensures that the signatory agrees to the content of the document and accepts all the conditions contained therein.
Individual character: The signature must have an individual character, even if it is illegible. The Federal Court of Justice stipulates that it should consist of unique and characteristic lettering that is unique and allows a clear inference to the name of the signatory. This means that the signature should at least contain individual, clearly recognizable letters that adequately identify the signatory.
Uniformity: It is important to always use the same signature to ensure consistency and recognizability.
A signature is invalid if it is forged or was executed under duress. A signature executed by an unauthorized person is also invalid. If the signatory was not legally competent at the time of signing, the signature also loses its validity. Signatures that are made as a joke and do not constitute serious consent are also invalid. This is regulated by the so-called declaration of jest pursuant to Section 118 BGB.
Importance of the correct addition: The correct abbreviation is important to identify the type of representation. In a legal case, it depends on the overall circumstances. Intent alone does not determine whether you are only classified as a messenger or actually as a representative.
As digitalization progresses, more and more processes are taking place online and many contracts are only available in digital form. In such cases, one could come up with the idea of scanning and using a handwritten signature. However, a scanned signature is not legally valid for several reasons. The signatory cannot be clearly identified, consent to the contents of the document cannot be proven and a scanned signature can easily be forged or digitally replicated.
Electronic signatures are a secure and legally valid alternative to handwritten signatures. It is regulated by the European eIDAS Regulation and is implemented in German law by the Trust Service Act. In the event of a dispute, this signature has the same legal validity as a handwritten signature, as it enables the identification of the signatory, the creation of proof of consent and the guarantee of the integrity of the document and the signature.
In general, the main advantages are:
By using such a signature, companies and private individuals can ensure that their contracts and documents are not only legally binding, but also managed securely and efficiently. This is particularly important in a digital world in which business processes are increasingly handled online.
In an increasingly digitalized world, electronic signatures are an indispensable solution for the legally binding signing of contracts and documents. They not only offer legal security and traceability, but also flexibility and efficiency in contract management.
ContractHero's advanced e-signature (FES) ensures secure and linked signatures that enable identification of the signatory and make changes to documents traceable. For the highest security requirements, the qualified e-signature (QES) is available, which offers maximum trustworthiness and legal validity.
ContractHero allows you to send personalized invitations to sign contracts, making the signing process efficient and user-friendly. Signed contracts are securely stored and actively managed, minimizing risks. With ContractHero's e-signature, signing, archiving and management take place in one place. The signature audit provides you with technical proof of the signature process after the signature.
Take advantage of the benefits of digital signatures and optimize your contract processes with ContractHero. Find out how our advanced and qualified signature solutions can make your business processes more secure and efficient. Sign smarter, not harder - with ContractHero.
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