Which party holds the best interests in the principle-agent relationship?

In a principle-agent relationship, the principal is the party who delegates authority to the agent to act on their behalf. The principal holds the best interests in this relationship because their goals and objectives drive the actions and decisions made by the agent. The agent, while crucial in facilitating the transaction or service, operates under the authority given by the principal and must prioritize the principal's interests above all else.

For instance, in a real estate context, if a homeowner (the principal) hires a real estate agent (the agent) to sell their property, the agent's duty is to work diligently to achieve the best possible outcome for the homeowner, such as getting the best price or finding a buyer quickly. This duty of loyalty ensures that the agent acts in the best interests of the principal throughout the course of their engagement.

The broker and the client do play roles within this framework but do not hold the same level of inherent interest as the principal. The broker may represent the agent or facilitate transactions but ultimately acts in support of the principal's best interests as well. Similarly, while a client may be someone who utilizes the agent's services, the terminology in the context aligns the principal correctly as the one with the most significant entitlements and concerns regarding the outcome of the representation