In contracting, who is referred to as the principal?

In the context of contracting, the principal is typically defined as the party that has the primary responsibility for ensuring that the contractual obligations are met. This typically refers to the client who is hiring the consultant, as they are the ones commissioning work and ultimately responsible for its execution and outcomes.

The principal is the entity that engages others to perform a service or deliver a product, establishing the terms of the contract and holding the authority to approve or reject the final work produced. Although the provider who contracts directly with vendors holds significant responsibilities, they act on behalf of the principal and are accountable to them. Therefore, the client who hires the consultant is indeed the principal, making them the correct choice.

This understanding is essential for anyone involved in real estate consulting or any contract-based project, as it clarifies the roles and responsibilities that shape contractual relationships.