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Most people are familiar with the use of the word “agent” from interactions in their daily lives. Common examples of agency relationships are real estate agents, who buy or sell a house on your behalf, or stockbrokers, who buy and sell shares on your behalf. More formally, agency “is a relationship that exists when one party represents another party in the formation of legal relations.” The agent is the “person who is authorized to act on behalf of another” and the principal is the “person who has permitted another to act on his behalf.” Agents are often given authority to bind principals in contractual relationships.