A Letter of Authorization (LOA) is a formal written document in which an individual or organization (the authorizing party) grants another person or entity (the authorized party) permission to act on their behalf for a specific, limited purpose. Unlike a power of attorney, which creates a broader agency relationship under the Restatement (Third) of Agency, a letter of authorization typically covers a single transaction or a narrow scope of activity and does not require the formal execution requirements (notarization, witnesses) that many states impose on powers of attorney.

The legal effect of a letter of authorization depends on the context in which it is used. When presented to a third party (such as a bank, government agency, or business), the LOA serves as evidence that the authorized party has been granted apparent authority to act. Under agency law principles codified in the Restatement (Third) of Agency Section 2.03, a third party who reasonably relies on the apparent authority created by the LOA is generally protected, even if the authorizing party later disputes the scope of the authorization.

Letters of authorization are distinguishable from powers of attorney in both scope and formality. A power of attorney under the Uniform Power of Attorney Act (adopted in 22 states) requires specific statutory language and may grant broad, durable authority that survives the principal's incapacity. An LOA is typically limited in duration and purpose, expires upon completion of the specified task, and does not survive incapacity unless explicitly stated.

An individual who cannot personally appear at a government office to collect documents, file paperwork, or complete an administrative process authorizes a trusted person to act on their behalf through an LOA. Common scenarios include authorizing someone to pick up a passport, register a vehicle at the DMV, or file documents with a county recorder's office.

Business owners who need an employee or agent to represent the company in dealings with suppliers, customers, or regulatory agencies use an LOA to define the scope of the representative's authority. The letter prevents the representative from exceeding their authorized role and protects the business from unauthorized commitments made without proper approval.

Parents authorizing another adult to make medical decisions for a minor child during travel or temporary care situations need an LOA that specifies the scope of medical authority, the child's insurance information, and any known allergies or medical conditions. While not a substitute for a formal medical power of attorney, an LOA may be accepted by healthcare providers for routine and emergency care decisions.

Property owners authorizing a property manager, contractor, or family member to handle specific real estate matters such as receiving deliveries, granting access to inspectors, or signing for minor repairs use an LOA to document the delegation. The LOA protects the owner from liability for actions taken outside the authorized scope and gives the agent documented authority to present to third parties.

The authorizing party's identification must include full legal name, address, and contact information. If the authorizing party is a business entity, the LOA should identify the entity name, state of incorporation or formation, and the title of the individual signing on behalf of the entity with authority to do so.

The authorized party's identification must similarly include full legal name and sufficient identifying information for the third party to verify the authorized person's identity upon presentation. Some institutions require government-issued identification matching the name on the LOA.

The scope of authorization must be defined with specificity. A broadly worded LOA creates risk that the authorized party may take actions beyond the authorizing party's intent. The letter should describe the exact action authorized, any limitations on the authority, and whether the authorized party may delegate the authority to others.

The duration and expiration provisions must specify when the authorization begins and when it terminates. An LOA without an expiration date may create open-ended authority that the authorizing party cannot easily revoke if the authorized party presents it to a third party. Best practice is to include a specific expiration date or a condition that triggers termination, such as completion of the specified task.

The authorizing party's signature and date are essential for validity. Some institutions and government agencies also require notarization of the signature, particularly for financial transactions or real estate matters. The LOA should state whether photocopies are acceptable or whether the original document must be presented. A revocation provision should specify how the authorizing party may withdraw the authorization before its natural expiration.