In which type of agency does the agent have limited authority?

The type of agency in which the agent has limited authority is known as a special agency. In this arrangement, the agent is granted specific powers to act on behalf of the principal, typically relating to a single transaction or a defined task. This limitation ensures that the agent cannot make decisions outside the scope of the specified authority granted by the principal.

For example, a real estate agent who is employed to sell a property represents a special agency; they can negotiate and finalize the sale, but cannot make decisions on behalf of the principal concerning other unrelated matters. This is particularly important in transactions where the principal may want to maintain control over other aspects of their affairs.

In contrast, a general agency would provide the agent broader authority to act on behalf of the principal in a variety of matters. A universal agency would grant the agent almost full power to act on behalf of the principal in all matters. An implied agency arises through the behavior and actions of the parties involved, rather than through a formal agreement, and does not explicitly limit the agent’s authority as seen in special agency. Thus, special agency is distinctly characterized by its limited scope of authority.