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.

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