What is a general agency?

A general agency is characterized by the broad authority granted to the agent by the principal, allowing the agent to act on behalf of the principal in a range of matters. This is why the choice identifying that the principal is liable for the actions of the agent within their duties is correct. This liability stems from the agency relationship and includes acts that the agent performs within the scope of their authority.

In a general agency relationship, the agent has the power to make contracts and conduct business dealings that align with the interests of the principal, thus binding the principal to the actions taken by the agent. This type of authority differs significantly from other forms of agency, such as special agency, where the agent’s authority is limited to a specific task or transaction.

Other options do not accurately describe a general agency. For example, a single transaction representation indicates a narrow scope of authority, which contrasts with the broad powers inherent in general agency. Similarly, limited scope representation also refers to specific, confined duties, which does not align with the concept of general agency. Furthermore, a sector of real estate focused solely on residential sales pertains to industry classification rather than a type of legal relationship between a principal and an agent.