Which type of agency relationship limits agents to only performing acts permitted by their principal?

Prepare for the Law of Agency Test. Delve into multiple choice questions featuring hints and explanations. Sharpen your understanding of agency law and gear up for success!

The correct answer is special agency. In a special agency relationship, the agent is authorized to perform specific acts on behalf of the principal, but their authority is limited to those defined tasks. This means the agent can only act within the scope of authority granted by the principal and must adhere strictly to their instructions.

In contrast, a general agency involves a broader scope of authority, where an agent can engage in a wide range of actions on behalf of the principal. This type of relationship allows for more discretion in decision-making and does not impose the same strict limitations as a special agency.

Single agency refers to a relationship where the agent represents one party in a transaction, but it does not inherently limit the agent's actions to only those specifically permitted by the principal. Subagency involves an agent appointing another agent, which can create additional layers of authority and does not strictly limit the actions to only those permitted by the original principal.

Thus, special agency is the type of agency that unequivocally restricts agents to performing only the acts that their principal expressly permits.

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