Who is defined as the party that appoints another to act on their behalf?

The principal is the party that appoints another individual or entity to act on their behalf. In the context of agency law, the principal grants authority to the agent to perform specific actions, make decisions, or enter into agreements that will legally bind the principal. This relationship is foundational in various fields, including business and law, where the principal relies on the agent's expertise or ability to manage tasks that the principal may not have the capacity to handle directly.

In this context, an agent is someone who acts on behalf of the principal, but the agent does not hold the original authority; rather, they are given that authority by the principal. An attorney would typically provide legal representation and advice but is often considered an agent of their client, who is the principal. A contractor may perform services or work but is not necessarily acting as a principal-agent relationship unless specified. Understanding the role of the principal clarifies the dynamics of these relationships, especially in legal and contractual scenarios.