The agency relationship that is created when the principal's conduct leads a third party to believe that another person serves as his or her agent is: Agency by estoppel
Agency by estoppel can be defined as the way in which a principal tend to make a third party believed that another person is the agent in which the third party then carried out transaction with the person because he/she believed that the person is an agent.
This person tend to act as an agent despite not having the right to act as an agent.
Therefore this scenario is an example of Agency by estoppel.
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