Proxy in Contracts: Voting on Someone's Behalf
What Is a Proxy?
In contract and corporate law, a proxy is the authority granted by one person to another to vote or act on their behalf. The term refers both to the authorization itself and to the person who receives it. Proxies are commonly used when a shareholder, member, or partner cannot attend a meeting but wants their vote counted.
How Proxy Voting Works
- The principal (the person granting authority) signs a proxy form specifying the scope of authority
- The proxy holder attends the meeting and votes according to the principal's instructions — or, if given discretionary authority, uses their own judgment
- The proxy vote counts the same as if the principal were present
Types of Proxies
- Directed proxy — the principal specifies exactly how to vote on each matter
- Discretionary proxy — the proxy holder decides how to vote
- Limited proxy — authority is restricted to specific matters or a single meeting
- General proxy — broader authority across multiple matters or meetings
- Irrevocable proxy — cannot be withdrawn, often used in connection with voting agreements (must typically be coupled with an interest)
Key Limitations
- Most proxies expire after a set period (many state laws default to 11 months if no duration is specified)
- The principal can usually revoke a proxy at any time by attending the meeting personally or granting a later proxy
- Some agreements restrict who can serve as a proxy holder
- Irrevocable proxies require special legal justification
When to Consult a Lawyer
Consider consulting an attorney before granting an irrevocable proxy, or if you suspect proxy abuse in your organization's governance.
This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney for guidance specific to your situation.