Agency Theory
/ˈeɪdʒənsi ˈθɪəri/
Definitions
- (n.) A legal and economic theory explaining relationships where one party (the principal) delegates work to another (the agent), focusing on conflicts of interest and mechanisms to align incentives.
Agency theory addresses the challenges principals face in ensuring agents act in their best interest.
Forms
- agency theory
Related terms
See also
Commentary
Agency theory is central in corporate law and contract law for understanding duties and conflicts in delegated authority relationships.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.