Which relationship is characterized by a person acting on behalf of another with a duty to act in their best interest?

The relationship characterized by a person acting on behalf of another with a duty to act in their best interest is known as agency. In agency relationships, the agent is authorized to act for the principal (the person they represent) and must prioritize the principal's interests above their own. This fiduciary duty is fundamental to agency law and ensures that the agent takes actions that are in the best interest of the principal, creating a trust-based relationship.

In this context, while partnerships, contractual relationships, and employment relationships may involve similar elements of responsibility or duties, they do not inherently require the same level of fiduciary duty that defines agency. In partnerships, for example, partners act in the interests of the partnership as a whole rather than for each individual partner's best interest. Similarly, employment relationships center around duties owed to the employer but do not necessarily embody the fiduciary obligations of an agent towards a principal. Thus, "agency" is the most accurate term for this type of relationship.