Which framework governs the principal-agent relationship traditionally?

The principal-agent relationship is traditionally governed by the common law of agency. This body of law establishes the legal principles and responsibilities that define the relationship between the principal (who authorizes another to act on their behalf) and the agent (who is entrusted to act on behalf of the principal).

In this framework, the agent is obligated to act in the best interest of the principal, exercising a duty of care and loyalty. Common law of agency outlines the rights and obligations of both parties, including how agents should represent their principals in various transactions. This principle is foundational in various fields, including real estate, where brokers and agents operate under these legal expectations.

In contrast, community property pertains to laws regarding property ownership and distribution among married couples, while commission relates to the payment structure for services rendered, particularly in sales contexts. Comparable often refers to market analysis involving similar properties or assets. These terms do not encapsulate the legal framework governing the responsibilities and rights inherent in the principal-agent relationship.