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

Which type of agent is authorized to represent the principal in a specific matter?

1. General agent

2. Special agent

3. Universal agent

4. Limited agent

The correct answer is: Special agent

A special agent is specifically appointed to handle a particular transaction or act on behalf of the principal in a defined area or for a certain task. This means that their authority is limited to this specific matter, which distinguishes them from general agents that have broader authority to act in various matters on behalf of the principal. For example, if a principal hires an agent to negotiate the sale of a particular property, that agent is acting as a special agent, limited only to that transaction. Once the deal is completed, the authority to act on behalf of the principal in that context ceases. This focused representation ensures clarity in the agent-principal relationship, highlighting that the agent's powers are not implied to extend beyond the specific duties outlined by the principal. In contrast, general agents have broader authority to conduct business across various aspects, universal agents have extensive authority to act on behalf of the principal in all matters, and limited agents would indicate restrictions on their authority that are not clearly defined in a specific transaction manner.