This section is from the book "Elementary Banking", by John Franklin Ebersole. Also available from Amazon: Elementary Banking.
In general any person who can make a contract can appoint an agent. Some persons who cannot make contracts themselves may be agents, at least so far as binding the principal and a third party is concerned. An agency may be created by an express agreement between the parties (principal and agent). This agreement may be oral or written. If written it may also be sealed. An agency may also be implied from conduct; for instance, partners are held to be the agents of each other; a guest at a hotel could assume that the clerk has authority to take charge of money handed to him for safe-keeping. Agency may arise from relationship; a wife can bind her husband to pay for necessaries which she has purchased. If A allows B to represent himself as A's agent, and does not protest, he cannot later deny that B was his agent; that is, the agency is created by estoppel. (The term "estoppel" is defined as follows: when a party by conduct or language has caused another reasonably to believe in the existence of a certain state of things, and the other party acts on that belief, the first party is precluded from denying the existence of that state of things to any one who has justifiably relied on his language or conduct.) Suppose B acts as A's agent, but without the knowledge of A. If, when A learns of it, he takes advantage of B's acts, he cannot then deny that B was his agent. He is held to have ratified B's unauthorized act. Since agency is the result of a contract it can be terminated only in the ways that an ordinary contract may be terminated; that is, by complete performance; by the express terms of the contract, which may provide for its termination; by mutual agreement of the parties; by impossibility of performance; by operation of law; or by breach of the contract. Under "operation of law" would come the bankruptcy of the principal, which will discharge the contract; but the bankruptcy of the agent does not necessarily terminate his agency. The death of either party will terminate the agency.
 
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