A. a principal and a consumer
B. a principal and a producer
C. a principal and a third party
D. a principal and an agent
Correct Answer:
Option D – a principal and an agent
Explanation
An agency contract involves the principal and the agent.
The principal-agent relationship is an arrangement in which one entity legally appoints another to act on its behalf. In a principal-agent relationship, the agent acts on behalf of the principal and should not have a conflict of interest in carrying out the act.
