Unless an agency is irrevocable (ie where it is given in the agent’s interest), the authority given to an agent by a principal of sound mind is terminated if the principal is subsequently afflicted by mental incapacity. For the purposes of agency law, a person is considered mentally incapacitated if they are unable to appreciate the nature and quality of their actions.
Because it can be inconvenient in some circumstances for an agency to be terminated by the principal’s mental incapacity, legislation provides for what is called an ‘enduring power of attorney’. When created in accordance with special requirements, such a power is ‘enduring’ because it remains valid despite any subsequent mental incapacitation of the principal. This allows a principal to make arrangements for the conduct of their affairs that will continue in the event of their becoming mentally incapacitated.