Future Business Leaders of America (FBLA) Business Law Practice Exam

Which type of agent has authority restricted to achieving a specific purpose?

1. General agent

2. Special agent

3. Universal agent

4. Subagent

The correct answer is: Special agent

The correct answer is the type of agent whose authority is specifically limited to achieving a particular goal or task, and this is referred to as a special agent. A special agent is appointed to carry out a specific transaction or purpose, such as selling a piece of property or negotiating a contract. Their powers are determined and confined to the particular activity for which they are designated. This specialized authority enables the special agent to perform certain actions on behalf of the principal while ensuring that their responsibilities remain focused. Because their role is limited, the special agent cannot make decisions or take actions outside of their designated task or area. In contrast, a general agent typically has broader authority to act on behalf of the principal in various situations that fall within a general scope of business. A universal agent possesses extensive authority to act for the principal in all matters, while a subagent acts on behalf of another agent rather than directly for the principal. These distinctions highlight the unique role that a special agent plays in the agency relationship.