Question

Under the rules of agency, the party for whom the agent acts is called the ______.

1) Principal
2) Agent
3) Third party
4) Customer

Answer 1

The party for whom the agent acts in the context of agency law is called the Principal. A customer is someone who pays for a product or service but is not the party represented by an agent.

Step-by-step explanation:

In the context of agency law, the party for whom the agent acts is called the Principal. An agent acts on behalf of the principal and engages with third parties to perform tasks or make decisions within the scope of the agent's authority. While the term Customer can often be used in business conversations, it specifically refers to a person or organization that pays for a design or product, but this does not align with the party represented by an agent in an agency relationship.