Principal/Agent Analogy
Suppose you and your family are about to leave on a vacation, but
remember you haven't gotten around to selling a spare and unneeded
car parked behind your garage. You drive the spare car to a
used car lot and sign a limited power of attorney for the salesman
there to sell this car while you are gone. With this limited
power of attorney, you (the principal) authorize the car salesman
(your agent) to have authority to act on your behalf in a specified
and limited way and for a limited and specified purpose.
Upon return from vacation, your first stop is to check in at the car
lot. The salesman proudly announces that he has successfully
sold your spare car. With further pride, the salesman
announces that he also sold your house. He brags that he was
able to get you a pretty good price for your home, doing you a great
favor. Of course, you are shocked and not happy.
You, the principal in this arrangement, had not authorized your
agent, the salesman, to sell your house with the power of attorney
you signed, but only to sell your car. Yet, without your
permission or agreement your agent determined to expand his role and
authority. Maybe with legal action you can get your home back,
but local judges are known to be sympathetic to car lots. Good
luck with that and the legal expenses for trying to get your home
back.
This is analogous to the federal government, including the Congress,
the courts, and the executive, determining the extent of the powers
delegated to them by the states in the Constitution. In that
arrangement, the states which adopted the Constitution and thereby
created the federal government are the principal, and the federal
government is the agent of the states.
Properly, only the principal may define what powers the principal
has delegated to its agent.