The Agency Relationship

The agency relationship is a legal arrangement where one person, called the agent, acts on behalf of another person, known as the principal. This relationship allows the agent to make decisions and conduct transactions that affect the principal's interests. For instance, when you hire a real estate agent to sell your house, the agent represents you in negotiations and other dealings. Both parties have certain rights and responsibilities; the agent must act in the principal's best interest, while the principal must provide the agent with necessary information and support.