What legal relationship does an agent have with a principal?

An agent has a fiduciary relationship with a principal, which is defined by trust and loyalty. This relationship requires the agent to act in the best interests of the principal, putting the principal's needs and objectives above their own. This level of trust obligates the agent to provide full disclosure, avoid conflicts of interest, and maintain confidentiality regarding the principal's affairs.

Fiduciary relationships are foundational in various fields, particularly in real estate, where agents represent clients in significant financial transactions. The duty of loyalty ensures that the agent must not misrepresent or withhold information that could affect the principal’s decisions.

In contrast to a fiduciary relationship, other types of relationships such as landlord-tenant or partnership arrangements do not encompass this same level of trust and loyalty. A mutual client relationship does involve interaction between a client and an agent but lacks the specific obligations that come with a fiduciary duty.