---
term: "Principal"
category: "Agents and autonomy"
url: https://agenticopenfinance.com/glossary/principal
source: AgenticOpenFinance glossary
---

# Principal

> The person or organisation on whose behalf an agent acts and whose authority the agent exercises.

The principal is the person or organisation on whose behalf an agent acts and whose authority the agent exercises. In agentic finance the principal is usually the customer or business that granted a mandate, and every action the agent takes should be attributable to that principal and fall inside what they authorised. The term comes from the law of agency, and the US E-SIGN Act uses the same idea when it requires an electronic agent's action to be legally attributable to the person to be bound.

Related terms: [AI agent](https://agenticopenfinance.com/glossary/ai-agent.md), [Mandate](https://agenticopenfinance.com/glossary/mandate.md), [Electronic agent](https://agenticopenfinance.com/glossary/electronic-agent.md), [Know Your Agent (KYA)](https://agenticopenfinance.com/glossary/know-your-agent.md)