Agency by estoppel arises when a principal's actions lead a third party to reasonably believe that an agent has authority to act on the principal's behalf, even if such authority was never granted. This doctrine prevents a principal from denying the agency relationship if the third party has relied on the apparent authority to their detriment.

Agency By Estoppel

Principal's actions

In various contexts, a 'Third Party' refers to an entity that is not directly involved in a transaction or agreement but may be affected by or have an interest in it. This can include legal, business, and political scenarios where the third party acts as a mediator, observer, or stakeholder with potential influence or claims on the primary parties' actions.

Third Party

Agent authority

Principal's behalf

Authority was never granted

Doctrine of agency

Denying the agency relationship

Apparent authority arises when a principal's conduct leads a third party to reasonably believe that an agent has the authority to act on the principal's behalf, even if the agent lacks actual authority. This legal doctrine protects third parties who rely on the appearance of authority in their dealings with agents, ensuring that principals are bound by the agents' actions within the scope of this perceived authority.

Apparent Authority

Detrimental reliance occurs when a party reasonably relies on a promise and suffers a loss as a result of that reliance, even if no formal contract exists. It is often invoked in legal settings to enforce promises under the doctrine of promissory estoppel, providing a remedy to prevent injustice.

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