Ace the PACE 2025 – Unleash Your Paralegal Superpowers!

In agency law, the term "principal" refers to the person that the agent represents. This relationship is foundational to agency law, where the principal authorizes the agent to act on their behalf, typically in business or legal matters. The agent has the authority to make decisions and enter into contracts for the principal, creating a fiduciary relationship that obligates the agent to act in the best interests of the principal. This concept is essential for understanding the dynamics of agency relationships, including the responsibilities and liabilities of both the principal and the agent.

The other options do not accurately define the term "principal" as understood in the context of agency law. For example, describing a third party in a contract refers to someone involved in a contractual relationship but not directly the agency relationship. A judicial authority overseeing legal proceedings relates to the court's role rather than the agency relationship itself. The main defendant in a criminal case is a legal term relevant to criminal law rather than agency law, further distinguishing it from the correct definition of a principal in the agency context.