Los Blanc
Pete, the principal is the one who authorizes an agent to purchase and liquidate assets, and to raise funds by using the principal�s assets as loan collateral.
http://thelawdictionary.org/mercantile-agent/
The principal is also the party of authority in a business relationship.
http://thelawdictionary.org/principal-2/
In order to be recognized as the party of authority, the principal must be defined from the OUTSET (of a bill, claim, notice, etc.) otherwise the identity of the party of authority is unclear by defect of expression, making the correct jurisdiction over the principal equally unclear.
http://thelawdictionary.org/principal/