Principal Law and Legal Definition

Agency is an agreement, express , or implied, by which one of the parties, called the principal, entrusts to the other, called the agent, the management of some business; to be transacted in his name, or on his account, and by which the agent assumes to do the business and to render an account of it. A "principal"-"agent" relationship is a relationship in which one person has legal authority to act for another.

The agency must be given ahead of time, or subsequently adopted; and in the latter case there must be an act of recognition, or an acquiescence in the act of the agent, from which a recognition may be fairly implied. For example, the person making a power of attorney appointment is called the principal.