What is the “equal dignities rule?”

On Behalf of | Jun 29, 2015 | Powers Of Attorney

To be legally effective, a power of attorney must adhere to specific guidelines and requirements as set forth under Nevada law, which we have addressed in earlier posts. As important to remember is that once a power of attorney is established, it must still follow certain legal requirements in order for the authority it carries to be validly executed.

One such requirement is known as the “equal dignities rule.” This is a legal doctrine that requires an agent under a power of attorney must have in writing his or her authority to enter into contracts, especially those contracts which themselves are required to be in writing. As such, you might think of the equal dignities rule to be a cousin of the statute of frauds, which requires some types of contracts — those for goods valued at $500 or more, or which would require at least one year to perform, or which are connected to interests in real property — must be in written form to be legal.

In operation, the equal dignities rule would require the agent under a power of attorney to have written authority in the power of attorney document to be legally empowered to enter into one of the contract types covered by the statute of frauds. Absent such specific written authority, any such agreement that the agent enters into may be attacked as void.

Crafting a power of attorney requires that the principal give some advance thought not only to the form of the power of attorney itself, but also to the extent of authority that the agent should have. By working with an attorney familiar with power of attorney documentation, you can have a greater assurance that the power of attorney will be effective for all of its intended purposes.