Re-authorization (Sub-delegation) is among the relatively common civil transactions in current, particularly in cases where one or more parties to a contract are unable to directly participate in executing the contract. In this article, NPLaw will clarify the legal regulations on such a matter.

I. Current practices relating to re-authorization (sub-delegation)

In some cases, parties enter into an authorization agreement (Power of Attorney) to authorize the performance of specific tasks within the authorized scope; however, the authorized party is subsequently unable to personally execute the obligations previously agreed upon with the principal.

At this point, in order to ensure that the rights and obligations of the parties are properly fulfilled, the authorized party may agree to transfer the authorization to a third party.

II. Regulations relating to re-authorization (sub-delegation)

1. What is re-authorization (sub-delegation)?

The concept of re-authorization (sub-delegation) is not specifically defined in any legal document. However, based on relevant statutory provisions, it may be understood as a legal act whereby the authorized party authorizes a third party to act on their behalf in executing the tasks previously entrusted to them.

2. Cases in which re-authorization (sub-delegation) is permitted

The authorized party may only authorize a third party in the two circumstances prescribed by law. Under Article 564 of the Civil Code 2015, the authorized party may further authorize another person in the following circumstances:

Cases where re-authorization (sub-delegation) is allowed

  • With the consent of the principal.

In such a situation, due to subjective reasons, the authorized party may be unable to execute the tasks assigned by the principal. To ensure proper execution of obligations, the authorized party may select another individual to receive the authorization, with the principal’s consent.

  • Due to force majeure, where without re-authorization, the purpose of establishing and performing the civil transaction for the benefit of the principal cannot be achieved.

In such circumstances, the authorized party is typically unable to execute their obligations due to the force majeure; therefore, to ensure the principal’s interests, the authorized party may authorize another person to execute the obligations.

Thus, the authorized party may transfer their obligations to another person/third party if (i) the principal consents, or (ii) a force majeure prevents the authorized party from executing the original obligations.

3. What contents should a re-authorization (sub-delegation) contract include? Which is the most important? Why?

The contents of the contract are one of the most important issues the parties must consider when entering into a contract. 

A re-authorization contract is an agreement between the parties regarding the execution of tasks on behalf of the original principal, based on mutual consent. Accordingly, the re-authorized party is obligated to execute one or several specific tasks on behalf of the original principal.

Therefore, the terms, agreed contents, and form of the contract must be consistent with the original authorization contract. In such cases, the subsequent authorized party may only execute tasks within the scope of the original authorization.

An authorization contract includes the following basic contents:

  • Personal information of the Principal and the Authorized Party (including: full name; year of birth; ID number and date of issuance; place of permanent residence);
  • Basis of authorization (i.e., the notarization/certification office where the original authorization was executed);
  • Authorized tasks;
  • Rights and obligations of each party;
  • Duration of authorization;
  • Remuneration for executing the tasks (if any);
  • General commitments;
  • Signatures of the parties.

The most important contents requiring attention are the scope of authorization and the form of authorization. Under Clauses 2 and 3, Article 564 of the Civil Code 2015:

  • The re-authorization may not exceed the scope of the original authorization.
  • The form of the re-authorization contract must be consistent with the form of the original authorization contract.

In summary, when entering into a re-authorization contract, the parties must ensure that the agreement contains the above-mentioned contents, particularly the scope and form of authorization, which must be consistent with the original authorization.

III. Questions relating to re-authorization (sub-delegation)

1. Is the consent of the original principal required for re-authorization (sub-delegation)?

Under Article 564 of the Civil Code 2015, the principal’s consent is required when the authorized party intends to transfer the execution of authorized tasks to another person.

2. May the parties agree on remuneration for re-authorization (sub-delegation)?

The parties may freely agree on remuneration in a re-authorization contract.

3. Is a written re-authorization (sub-delegation) contract mandatory?

Under Articles 119 and 562 of the Civil Code 2015 regarding the form of civil transactions and authorization contracts, the law does not require a specific form for contracts. A civil transaction may be established orally, in writing, or through specific acts unless the law requires a particular form.

However, in practice, a written authorization contract should be made. Accordingly, in the absence of written evidence, the existence of an authorization relationship is difficult to prove in case of disputes.

Thus, although not legally mandatory, the parties should execute the re-authorization contract in writing and have it notarized/certified to protect their rights and provide evidentiary basis if a dispute arises.

4. If a person is authorized to sign a labor contract, may they further authorize a third party to sign it?

Under Clause 5, Article 18 of the Labor Code 2019 on the authority to execute labor contracts, a person authorized to sign a labor contract may not further authorize another person to execute the labor contract.

Therefore, a person authorized to sign a labor contract is not permitted to re-authorize a third party.

5. May a person who signs administrative documents under delegated authority further authorize another person to sign?

Under Clause 3, Article 13 of Decree 30/2020/ND-CP, an individual signing administrative documents under delegated authority may not further authorize another person to sign administrative documents.

6. What are the legal consequences if the principal unilaterally terminates the authorization contract but fails to notify the third party?

Under Article 569 of the Civil Code 2015 on unilateral termination of authorization contracts, the principal must notify the third party in writing regarding the termination.

Thus, if the principal terminates the authorization contract with the authorized party but does not notify the third party, the contract between the authorized party and the third party remains valid, unless the third party knows or must have known about the termination.

IV. Legal consultancy services relating to re-authorization (sub-delegation) 

The above information addresses common legal issues regarding re-authorization (sub-delegation) that NPLaw wishes to provide to our readers. Should you have any further questions or require additional clarification, please contact NPLaw through the following channels: