What does it mean for an agent to have "control" in an agency relationship?

In an agency relationship, the concept of "control" primarily refers to the principal's authority to guide and direct the actions of the agent. When we say that the principal retains the right to direct the agent’s actions, it indicates that the principal can specify how the agent should perform their duties and make decisions within the scope of the agency agreement. This ensures alignment with the principal's goals and objectives, as the agent is essentially acting on behalf of the principal.

This dynamic is fundamental to the agency relationship; the agent acts as a representative of the principal and must adhere to the directives given by the principal. Although the agent may have some level of discretion in certain matters, the overarching framework of control lies with the principal, who can dictate terms, oversee performance, and intervene as necessary. This control helps maintain accountability in the relationship, ensuring that the agent acts in the best interest of the principal.

In contrast, other options imply that the agent has freedom or that the principal has complete power over all decisions without retaining specific direction, concepts that do not accurately capture the nature of control in this legal context.