Agency by estoppal

What does Agency by estoppal mean in American Law?

The definition of Agency by estoppal in the law of the United States, as defined by the lexicographer Arthur Leff in his legal dictionary is:

The kind of agency which arises when person P allows person A to appear to a reasonable third person, T, as someone who has the power to act on P’s behalf. For example, let us say that P enters into an arrangement with A whereby A will solicit orders for P’s product and pass them on to P for acceptance or rejection. It is clearly understood between P and A that A cannot bind P to sell anything. But P allows A to display P’s company name on his wall and forms, to mail acceptances to buyers over

A’s signature, etc. If T comes in and A takes and accepts T’s proffered deal, it would most likely be held that an agency by estoppal had arisen between P and A, and that therefore P could not thereafter rely on A’s actual lack of authority to refuse to fill T’s order. See also apparent authority; estoppal. The same result would ordinarily follow even if P had no relationship at all with A, so long as P might be found to have sufficient notice of A’s activities, or to be otherwise remiss (at least negligent) in not taking steps to stop A’s pretence.