When a principal authorizes an agent to perform a particular act or transaction, what type of agency is this known as?

When a principal authorizes an agent to perform a specific act or transaction, this is known as Special Agency. In this type of agency relationship, the agent is given limited authority to act on behalf of the principal, often for a single transaction or a specific purpose. This is in contrast to other types of agency relationships where the agent may have broader powers.

Special Agency is particularly common in real estate transactions, where agents facilitate the buying or selling of property under specific instructions from the principal. For example, a seller may give a real estate agent the authority to market and sell their home. However, the agent cannot make any other decisions beyond what has been explicitly authorized.

In comparison, General Agency provides the agent with a broader scope of authority to act on behalf of the principal in a range of activities, while Universal Agency allows the agent to act in almost all matters pertaining to the principal’s affairs. Limited Agency refers to situations where the agent has restricted powers but does not typically apply to the specific authorization for a single transaction. Thus, the focus on a particular act or transaction defines why this agency is classified as a Special Agency.