What best describes the relationship defined by agency?

The relationship defined by agency is best described as the relationship between a principal and an agent. In this context, the principal is the party who authorizes the agent to act on their behalf. The agent serves as a representative, tasked with carrying out specific duties or responsibilities in the interests of the principal, guided by the principal’s instructions. This legal and fiduciary relationship is foundational in various sectors, including real estate, where agents must act in the best interest of their clients (the principals), maintaining trust and loyalty throughout all dealings.

The dynamics of this relationship involve several key aspects, such as the agent's duty to act within the scope of authority granted by the principal and to keep the principal informed of important matters. This agency relationship is critical in situations where one party needs another to represent their interests effectively and is distinguished from other relationships, such as those between buyers and sellers, landlords and tenants, or contractors and clients, which do not carry the same legal or fiduciary implications as the agency relationship.