Articles > Small Business

How Do Authority to Act Forms Work?

June 12, 2021   Philip Evangelou

Authority to Act forms are documents that allow an individual to authorise a trusted person to act on their behalf. However, these are not defined as legal documents and subsequently differ from Power of Attorney power. Authority to act only applies to the specific occasion elected and thus the authorisation is not ongoing and does not extend to different matters.

Without an Authority to Act form completed, you cannot allow someone else to fill out an application or progress through a government process for you legally.

What is the Purpose of Authority to Act forms?

The purpose of Authority to Act forms is to to allow a third party to act on one’s behalf; this third party may be more knowledgeable on the matter at hand or may simply be providing assistance at a time of need. 

When to Use An Authority to Act Form

Authority to act forms can be used in various situations which include but are not limited to the following; payment of a fine, accessing social services, acting on behalf of an incapitated person for Medicare purposes, paying a towing invoice, managing an issue involving a government agency, university applications, providing a customs broker authority to complete your customs clearance and making an insurance claim. 

However, a notable exception to Authority to Act forms applying only to a specific occasion is the payment of a fine or fee via Revenue NSW; you can nominate someone to act on your behalf in this circumstance either on a limited or ongoing basis. 

Who Can You Give Authority To?

You can authorise any trusted person to act on your behalf such as a family member, friend, trusted associate, customs broker or tax agent. 

Application to Agency Relationships 

Businesses can also establish a relationship in which an agent has the authority to act on behalf of a principal; this is known as an agent-principal relationship. 

Both agents and principals have obligations arising from this relationship. For example, agents are obligated to exercise care, skill and diligence in their actions whilst principals are obligated to reimburse the agent for any agency-related expenses (unless stated otherwise).

However, if an agent acts outside of their given authority, they are said to have breached their contract with the principal and the principal can make a claim against them. Further, it is important to note that the principal is not bound by acts undertaken by the agent that fall outside the scope of the agent’s authority. For example, if an agent enters into an agreement without having the authority to do so, that agreement cannot be enforced against the principal. 

Agency can be terminated either when its set period expires or, in the case of an ongoing agency relationship, the parties agree to terminate. Whilst either the agent or principal can renounce or revoke their authority respectively in the absence of an agreement between both parties to do so, the other party remaining after the renouncing/revocation can make a claim for contract breach.

Key Points

Authority to Act forms allow for a third party to act on your behalf such as a friend or family member and can be used in a variety of circumstances. Businesses can also engage in an agent-principal relationship in which an agent acts on behalf of a principal. This relationship involves its own obligations and rules pertaining to authority breaches and termination.

If you have any questions regarding this article or any commercial legal need, get in touch with us by completing the contact form or by calling 1300 337 997.

About Philip Evangelou

phillipPhil is a director at OpenLegal. He has over 16 years experience working in private practice and in-house counsel in Sydney and London, giving him expertise in employment law, IP, finance, leases, dispute resolution, insurance and contracts.