The type of authority specified in an agency agreement is known as?

The correct answer is actual authority, which refers to the power that an agent has been expressly granted by a principal through a written or spoken agreement. In an agency relationship, actual authority allows the agent to act on behalf of the principal in specific transactions or situations that the principal has authorized. This type of authority is critical in real estate transactions, as it ensures that the agent can perform tasks and make decisions that have been agreed upon by the principal.

Understanding actual authority is essential because it defines the scope of an agent's responsibilities and the actions they can take without further consultation with the principal. In contrast, implied authority arises from the actions or circumstances surrounding the agency relationship, while express authority is about specific, clearly defined powers that the principal conveys. Apparent authority involves situations where third parties believe the agent has authority based on the actions of the principal, even if the principal did not grant that authority. Each type of authority plays a role in agency relationships, but actual authority is the one explicitly defined in an agency agreement.