How does a principal designate a successor agent?

A principal may name one or more successor agents directly in the power of attorney. The instrument may also grant the original agent or another designated person authority to select a successor. No separate writing is required unless the power of attorney itself imposes that requirement.

What events trigger a successor agent's authority?

Authority passes when the original agent resigns, dies, becomes incapacitated, is not qualified to serve, or declines to serve. The power of attorney may also end if no successor has been named and the sole agent can no longer act.

Must a successor agent provide written certification of status?

A successor agent may certify under penalty of perjury that the principal granted authority and that any prior agent is no longer able or willing to serve. This certification supplies evidence to third parties that the successor's authority is effective.

Does an informal handover of documents create a valid successor agent?

An informal handover combined with oral direction can create a valid successor when the power of attorney expressly authorizes the original agent to appoint a replacement. The absence of a separate written instrument does not invalidate the succession if the original document granted appointment power.

What happens when no successor agent is named and the original agent resigns?

The agent's authority terminates upon resignation. No one retains power under that instrument to bind the principal, and third parties cannot enforce contracts made after the resignation.

successor agent — Legal Definition, Examples & Cases

Plant Manager Appoints Replacement

Sebastian Santos signed a power of attorney naming Samuel Soto as original agent to manage his manufacturing plant while abroad. The document expressly authorized Samuel to appoint a successor if he resigned. Samuel resigned and handed the documents to Sierra Santos with oral instructions to continue operations. Sierra negotiated supply contracts on Sebastian's behalf, and the third party could not later challenge her authority on the ground that no written appointment instrument existed.

Voting Agreement Triggers Succession

Steven Silva and Seth Shapiro entered a shareholders agreement naming Sterling Manufacturing as their agent to vote shares. The agreement provided that if the agent ceased to serve, a majority of the remaining parties would appoint a successor agent by written instrument. When Sterling Manufacturing withdrew, the parties executed a writing designating Sentinel Security as the new agent. Sentinel Security's subsequent vote on corporate matters bound the principals because the succession clause had been followed.

Abercrombie v. Davies35 Del. Ch. at p.611, 123 A.2d at p.899

In 1947, a Delaware corporation known as American Independent Oil Company was organized to exploit a concession for oil and gas in the Kuwait-Saudi Arabian Neutral Zone in the Middle East. The three plaintiffs, James S. Abercrombie, Phillips Petroleum Company and Sunray Oil Corporation, and seven of the defendants became the stockholders of American. Under the Organization Agreement as supplemented, each stockholder was allowed to name to the board of directors one director for each 5,000 shares of stock held. The Certificate of Incorporation provided for cumulative voting. On March 30, 1950, certain defendants executed a so-called Agents' Agreement. The defendants Davies, Signal, Hancock, Globe, Lario and Ashland, who together own a majority of American's outstanding stock, entered into the Agreement with the following designated agents: W. W. Vandeveer, Davies, Jehle, John W. Hancock, Marshall, Black, Mosher and Young. The Agreement provided that the contracting shareholders should deposit with the agents their certificates for shares of American, the certificates to be endorsed or powers executed. The agents were to deliver the certificates and powers to a bank to be selected. The bank was to hold them in escrow. However, they could be withdrawn from escrow at any time upon the signatures of any seven agents. The Agreement provided that during its term the agents shall have the sole and exclusive voting power of the stock subject to this Agreement. The vote of the agents was to be exercised as a unit on any matter on which a vote of the stockholders is called for, as any seven of said agents shall direct and determine. If the agents did not agree the matter was to be submitted to arbitration in accordance with a procedure set out in the Agreement. The shareholders undertook to deliver to the agents and keep in effect during the life of the Agreement proxies giving such agents the power to vote the stock at all meetings. The Agreement was irrevocable for a period of ten years from its date unless seven agents voted to terminate it or less than 50% of the outstanding shares remained subject to the Agreement. The Agreement further provided that the shareholders should use their best efforts to cause the agents representing the corporate shares to be and remain identical with the persons representing the corporate shareholders on the board of American. The corporate shareholders would use their best efforts to cause their representatives on the Board of Directors to vote to initiate, maintain in effect or discontinue any general policy, plan, or program for the company as determined by the Agents or by any seven thereof. In the event of the failure of any such director so to vote, all parties agreed to cooperate and act in any legal manner possible to cause any director voting contrary to any such determination by the Agents to resign or be removed and to be replaced upon the Board. On December 9, 1954, a directors' meeting was held in Chicago at which all directors were present. A resolution was then adopted calling for a special meeting of the board to be held on December 16, for the purpose of considering and taking action upon proposed amendments to the by-laws, one of which would authorize the board to remove any officer without cause. This resolution received the affirmative votes of the six directors representing plaintiffs and the director representing Deep Rock. The other defendants who were parties to the Agreement opposed the resolution and stated that Ashland's directors violated the Agreement when they voted as they did. Plaintiffs, who are not parties to the Agreement, filed this action in the Court of Chancery of Delaware, New Castle, seeking a declaration that the Agreement is invalid. The case was decided on plaintiffs' motion for summary judgment, with the court issuing its opinion on January 16, 1956, granting reargument on April 30, 1956, and issuing a supplemental opinion on June 20, 1956.

successor agent

Uniform Acts

Common Examples

Plant Manager Appoints Replacement

Voting Agreement Triggers Succession

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