What type of agency is formed when a principal authorizes an agent to perform a specific act?

When a principal authorizes an agent to perform a specific act, it creates what is known as a special agency. In this type of agency, the agent is given limited authority to act on behalf of the principal for a particular purpose or for a specific transaction. The agent’s power is confined to the parameters set by the principal, which can include tasks like selling a particular property or negotiating a specific contract.

This structure ensures that the agent acts within the boundaries of authority granted, allowing for focused and limited representation. For instance, if a homeowner hires a real estate agent to sell their house, that agent may only represent the homeowner in the sale of that specific property, which exemplifies the characteristics of a special agency.

In contrast, a general agency would grant the agent broader authority to act on behalf of the principal in a wider range of matters, while a bilateral agency involves mutual obligations between parties, and a universal agency would allow an agent to act for the principal in any and all matters of business, thus providing a much more expansive level of authority.