Who is defined as an agent in the context of agency law?

In the context of agency law, an agent is defined as a person who acts with authority on behalf of another individual, known as the principal. This relationship is pivotal in transactions, particularly in real estate, as it establishes a legal framework whereby the agent has the capacity to make decisions, negotiate, and conduct business dealings in the best interest of the principal. The fundamental characteristic of an agent is the delegation of authority; they represent the principal's interests and have a fiduciary duty to act loyally and in good faith.

In real estate, agents can be real estate brokers or salespeople who represent buyers or sellers, executing various tasks like negotiating contracts or listing properties. This contrasts with other options where employees in a real estate firm may not necessarily act with the formal authority characteristic of an agent, buyers and sellers are not typically acting on behalf of someone else; they are the principals in a transaction rather than the agents.