Can a partner be both an agent and a principal in a transaction?

A partner can indeed serve the dual roles of agent and principal in a transaction, which supports the reasoning behind selecting the answer that affirms this possibility. In the context of a partnership, each partner has the authority to act on behalf of the partnership as an agent, engaging in business activities necessary for the partnership's operations.

When a partner acts as an agent, they make decisions and enter into contracts that bind the partnership, thus representing the interests of the partnership in transactions. Simultaneously, that same partner may also engage with external parties as a principal, where they might enter into agreements or transactions that directly involve their individual interests or contributions to the partnership.

This dual capacity allows for flexibility and responsiveness within the partnership, fostering effective management and governance. While there are regulations governing the duties and responsibilities of partners in these roles, the inherent nature of partnerships allows for this duality as long as the actions taken are within the scope of the partnership's business and do not conflict with the fiduciary obligations owed to the partnership or its partners.

Thus, the stance that a partner can function in both capacities is a reflection of the collaborative and multifaceted nature of partnership operations.