Originally Posted by: hdoran
I watch a ton of your videos, thanks for making them.[/quote]
You are welcome. Glad you are enjoying GT & my lessons.
[QUOTE=hdoran]
I see that the note of E is in the C major scale. But, the E major chord contains the G# as its 3rd.

As you note, G# is not a note in the C major scale. So, does this mean that the E major chord is not in the key of C major also?

Yes! You've got it right now. :) You have to consider all of the notes in a chord to know if all of them are found in a scale/key. If even one of them is out, that chord is not totally in the key. At that point, you've got an accidental, which is the specific term used for a note that is played in a piece of music that is outside of the main key the music is in.