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Where a person by his conduct or by statement has led another person to believe that a certain state of affairs exists that a certain person is his agent, he is estopped from denying the fact of that statement subsequently.

Example: A tells T within the hearing of P that he is P's agent. P does not object to this statement. Later on T supplies certain goods to A who pretends to br acting as an agent of P. P is liable to pay the price to T.

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