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elationship existed because Arnie was authorized to carry outtransactions for Perry.Many agreements are express, but others are implied. An expressagreement is one that involves clearly stated terms of agreement. If theparties draw up some sort of written contract, they have created a powerof attorney. At other times, however, the parties may imply by words oractions an agreement to the agency relationship.Example 12. Stan Williams is Paula Paxton’s chauffeur. A writtenagreement says his only duty is to drive Paula and her familyaround town. One morning, Paula tells Stan to take care of hercar while she vacations in Europe for a few weeks. Stan agreesto do so. Stan is now an agent. His original agreement was simplyto act as a chauffeur, which made him a servant but not an agent.However, Paula’s orders have changed his status. The ordersimply that Stan now has the power to make certain types of contractsin Paula’s absence, such as arranging for maintenance,hiring mechanics, and buying gas.The agency agreement does not have to be in any particular form andcan be oral or written. However, the equal dignities rule presents anexception to this standard. If the Statute of Frauds requires that a contractnegotiated by an agent be in writing, then the contract creating theagency relationship must be given “equal dignity” by also being madein writing. When a formal writing is used to confer authority on anagent, it is known as a power of attorney.By Operation of LawAgency relationships may be created automatically by operation oflaw. Sometimes the law creates an agency relationship by circumstance; atother times agency relationships arise through enactment of specific laws.Law and AcademicsA power of attorney is awritten instrument bywhich one person, aprincipal, appointsanother as agent andconfers the authority toperform certain specifiedacts on behalf of theprincipal. This power mayinclude the authority toenter into transactions onbehalf of the principal.Research ActivityPower of attorney can begranted in numerouscircumstances and givethe appointed agent avariety of methods forconducting transactions.Using the Internet,library, or other resource,research some of thecircumstances in whichthe power of attorneymight be granted and themethods in which I mightbe used to conducttransactions.Agency by Estoppel When the law creates an agency relationshipby circumstance, it is called agency by estoppel , also known asapparent authority. The circumstances usually involve some sort of communicationbetween the principal and a third party, which leads the thirdparty to reasonably believe that a nonagent is an agent.Example 13. In The Opening Scene, Mr. Pellis had told Mrs. Tuithat someone would be in the newspaper office to accept her ad.Because Caterina was there when she walked in, Mrs. Tui couldreasonably assume Caterina was Mr. Pellis’s agent. As a result,the newspaper publisher could not deny Caterina’s authority totake the advertising copy and the money from Mrs. Tui.Chapter 18: Creation of an Agency 405