Final answer:
The relationship where an agent is trusted to act on behalf of a principal is known as the Principal-Agent Relationship, a term defined by agency law.
Step-by-step explanation:
The term that refers to the relationship in which an agent is placed in a position of trust and confidence to the principal is called the Principal-Agent Relationship. In this legal arrangement, the principal grants authority to the agent to act on their behalf in business transactions or other matters. The agent owes a fiduciary duty to the principal, which means that the agent must act with the highest level of care and loyalty towards the principal's interests. The relationship is governed by principles of agency law, which define the rights and obligations of both parties.