You can grant it, but the ‘irrevocable’ element will not work: a principal cannot validly waive the right to revoke authority at any time. A power of attorney is therefore not a security instrument, and a structure allowing the other party to transfer your assets to itself on default also comes dangerously close to prohibited appropriation of collateral. Protect the transaction through escrow, a pledge or conditions in the agreement itself.
In a company sale, property transaction or joint venture, a request sometimes arises: ‘Give us an irrevocable power of attorney so we can complete the transfer if you stop cooperating.’ We understand what the other party wants: certainty. But a power of attorney does not provide it and can harm you.
Irrevocability cannot validly be agreed
A power of attorney is a unilateral act based on trust. The Civil Code (Act No. 40/1964 Coll.) allows the principal to revoke it at any time and excludes any agreement to the contrary:
The principal cannot validly waive the right to revoke the power of attorney at any time.
— Section 33b(3) of the Civil Code (unofficial English translation)
An irrevocability clause is therefore ineffective, however solemnly it is worded. Anyone relying on it as transaction security holds a document the other party can switch off at any time with one sentence.
Revocation has its own rules
Revocation takes effect when the representative learns of it:
Until the representative knows of the revocation, their legal acts have the same effects as if the authority continued. However, this provision cannot be invoked by anyone who knew or must have known of the revocation.
— Section 33b(4) of the Civil Code (unofficial English translation)
Against a third party whom you informed of the authority, you may rely on revocation only if you notified that person before the representative acted (Section 33b(5)). Therefore, deliver revocation by a provable method to both the representative and everyone to whom the power of attorney was presented. Consider form requirements in advance from the other direction too: if the representative is to submit a land registration application, the principal’s signature on the power of attorney must be officially certified (Section 30(4) of the Cadastral Act).
Why a power of attorney is not security
A structure stating ‘if you default, we will transfer your assets to ourselves in your name’ circumvents pledge rules, including the prohibition of appropriation of collateral. We discuss how courts assess such packages of signed documents in prohibited appropriation of collateral. A representative acting for their own benefit against the principal’s interests also encounters the limits of representation, and the act’s validity can often be challenged. An ‘irrevocable’ power is thus doubly unstable for its recipient: it can be revoked, and whatever is acquired through it may be lost in litigation.
What actually secures the transaction?
For money, use lawyer or notarial escrow with precise release conditions. For performance of an obligation, use a pledge, explained for s. r. o. interests in pledges over an ownership interest, or a transfer of rights by way of security with a duty to account. For transaction completion, include conditions precedent and subsequent, contractual penalties and an alternative performance mechanism, and use a shareholder agreement between members. Reserve powers of attorney for their purpose: representation in acts you trust the representative to perform.
How we can help
We propose security proportionate to the transaction, from escrow and pledge agreements to transfers of rights by way of security, and include protections between members in shareholder agreements. We prepare powers of attorney in the correct form, including signature certification. If the other party is already requesting an irrevocable power, contact us before signing. A safe alternative is easier to find while the transaction can still be structured.
This answer provides general information on the law as at 5 September 2026. It does not constitute legal services or replace an assessment of an individual case. The details of your situation may differ. Book a consultation to discuss them.
