Agency
Under NC agency law, the term 'principal' refers to:
AThe supervising broker in an office
BThe client on whose behalf the agent acts✓ Correct
CThe property being sold
DThe mortgage lender
Explanation
In agency law, the 'principal' is the client (buyer or seller) who has engaged the agent (broker) to act on their behalf. The principal is the party the agent represents.
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Key Terms to Know
Agency
A legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Dual AgencyA situation where a single real estate agent or brokerage represents both the buyer and the seller in the same transaction.
Fiduciary DutyThe highest legal duty an agent owes to a principal — requiring the agent to act in the principal's best interest above all others.
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