Who is referred to as the party that appoints the agent in a contractual relationship?

In a contractual relationship, the party that appoints the agent is referred to as the principal. The principal is the individual or entity that grants authority to the agent to act on their behalf. This relationship is foundational in agency law, where the principal relies on the agent to perform tasks or make decisions that affect the principal's interests.

The principal establishes the terms and conditions under which the agent operates, and this arrangement is legally binding within the framework of agency contracts. The agent, in turn, has a fiduciary duty to act in the best interests of the principal, adhering to the guidelines and authority given to them.

Understanding the role of the principal is crucial in various contexts, including business transactions, real estate deals, and even funeral service-related activities where representatives may act on behalf of families or deceased individuals. Recognizing the principal's role helps clarify responsibilities and expectations in the agency relationship, making it an essential concept in contractual agreements.