Which legal concept allows a principal to revoke an agent's authority?

The correct answer highlights that a special agency allows a principal to revoke an agent's authority. In a special agency, the agent is granted authority to act on behalf of the principal in specific transactions or for a particular purpose. This limited scope of authority gives the principal significant control over the agent's powers.

When a principal appoints an agent in a special agency, they can revoke that agent's authority to act on their behalf at any time, as they reserve the right to terminate the agent's powers due to the specific limitations set by the agreement. This concept differs from other types of agency, such as general agency or agency coupled with an interest, where revocation may not be straightforward due to broader ongoing relationships or vested interests.

Understanding this distinction is crucial in real estate transactions, where specific agency relationships dictate the parameters of authority granted to agents. Thus, recognizing the flexibility and control afforded to principals in a special agency reinforces the importance of clear agency definitions in real estate practices.