Concept:An agency relationship is created when one party is authorised to act on behalf of another in legal or business dealings.
Explanation:The principal is the person who gives the authority to act.
The agent is the person who is authorised to act on the principal's behalf.
Together, these two parties form the core of every agency relationship.
The agent may deal with third parties, but the third party is not a major party to the relationship itself.
Similarly, a bailee, bailor, creditor or shareholder may be involved in other commercial relationships, but they are not the essential parties to an agency.
Therefore, the major parties in agency are the one who grants the power and the one who exercises it.
Answer:C. principal and the agent