Book Opener

AGENCY BY ESTOPPELOften agency relationships are created bycircumstance. When is it reasonable to assumethat someone in a store has agency authority?When might making this assumption beunwise or unreasonable?Mr. Pellis told Mrs. Tui that someone would be in the office at noon.He said something that led her to wrongly conclude that Caterina wasan agent. Agency by estoppel can also arise by actions or appearancesalone. For example, when a retail establishment opens, the owners arecommunicating to the public that salespeople will be present to helpthem. If an impostor enters and pretends to be a salesperson, the storewill be liable for any loss incurred by an innocent third party duped bythe phony salesperson.By Statute Sometimes a state legislature decides that certain situationsjustify automatic creation of agency relationships by statute.Usually, the state has some special interest to protect. For example, inmany states the law requires corporations to appoint an agent who canbe served with a complaint and summons in case the corporation is sued.406 Unit 4: Being an Agent and Getting a Job