Final answer:
The principal is the person for whom the agent acts in a transaction. They authorize the agent to act on their behalf and are ultimately responsible for the outcomes.
Step-by-step explanation:
A party to a transaction or the person for whom the agent acts is known as the principal. In business, a principal is the person or entity that authorizes an agent to act on their behalf. The agent carries out the transaction on behalf of the principal, who is ultimately responsible for the actions and outcomes.
For example, in a real estate transaction, the buyer is the principal and the real estate agent is the agent. The agent acts on behalf of the buyer, representing their interests throughout the process.
Other terms mentioned in the question, such as customer, consumer, and client, have slightly different meanings in the context of business transactions. A customer is someone who pays for a product or service, a consumer is a person who uses or consumes the product, and a client typically refers to a person who seeks professional advice or services from a business.