In general, a principal is a person or thing that is more important than others when identified for a particular purpose. The term also has specific meanings in various fields of law.
In criminal law, principal refers to a person who commits a crime. The principal in the first degree is the perpetrator of the crime, while a principal in the second degree assists the principal in the first degree at the time of the crime. Principal in the second degree may also be referred to as an accessory.
- California’s Penal Code §31 states that “All persons concerned in the commission of a crime, whether it be felony or misdemeanor, and whether they directly commit the act constituting the offense, or aid and abet in its commission, or, not being present, have advised and encouraged its commission … are principals in any crime so committed.”
- 18 U.S. Code §2 states that “(a) Whoever commits an offense against the United States or aids, abets, counsels, commands, induces or procures its commission, is punishable as a principal. (b) Whoever willfully causes an act to be done which if directly performed by him or another would be an offense against the United States, is punishable as a principal.”
In agency law, the term refers to someone who authorizes another to act in their place. A principal’s authorization of an agent to take actions on their behalf gives rise to fiduciary duties in the principal-agent relationship. A principal’s identity may be disclosed or undisclosed to the person with whom the agent transacts.
New York’s Estate, Powers, and Trusts Law §11-2.1 defines principal as “property, disposed of in trust, in income from which is payable to or to be accumulated for an income beneficiary and the title to which is ultimately to vest in the person entitled to the future estate.”
In finance, principal can refer to the basic amount of a debt or investment, excluding any interest, profits, or other additional earnings on the basic underlying amount. A principal can also refer to the corpus of a trust, which is composed of the assets funding the trust. As regards a surety, the term refers to the person with primary responsibility to perform an obligation.
[Last updated in February of 2024 by the Wex Definitions Team]