Special agency occurs when principals give an agent a limited authority to act on their behalf.

• A. The principal delegates broad authority
• B. The agent may act in any capacity
• C. The agent acts without permission
• D. The principals give an agent a limited authority to act on their behalf

Answer: (D)

Special agency means the agent is empowered to do only specific tasks for the principal, within a limited scope. In real estate, a listing gives the broker authority to market the property, show it, and negotiate a sale for a defined period and for a particular transaction. The agent can’t bind the principal to deals outside that limited scope or act on other properties without further authorization.

If there were broad authority or the agent could act in any capacity, that would describe general (or universal) agency, not special agency. If the agent acted without permission, there would be no valid agency relationship for those acts.

So, giving an agent a limited authority to act on the principal’s behalf precisely captures the idea of special agency.