Who acts on behalf of another party in the principal/agent relationship?

In a principal/agent relationship, the agent is the party that acts on behalf of the principal. This relationship is fundamental in various business transactions, where the principal appoints the agent to perform certain tasks or make decisions on their behalf.

The agent has the authority to represent the principal and can enter into contracts or make commitments that are legally binding on the principal, depending on the scope of authority granted. This agency relationship allows for delegation of responsibilities, which can be particularly useful in complex business environments where the principal may not have the capacity or expertise to engage directly in every situation.

Understanding the role of the agent is crucial, as it also involves fiduciary responsibilities, meaning the agent must act in the best interest of the principal, maintain confidentiality, and avoid any conflicts of interest. This encapsulates the importance and the trust inherent in the principal-agent dynamic.

Other roles like the bailor and bailee relate to the transfer of possessions and responsibilities in a different context, specifically concerning property and the custody of goods, while the customer does not inherently represent or act on behalf of someone else but rather is typically the buyer of goods or services.