What is one potential consequence of a principal denying an agent’s authority by estoppel?

When a principal denies an agent’s authority by estoppel, it refers to a situation where the principal has led third parties to believe that the agent is authorized to act on their behalf, and then later claims that the agent does not have that authority. One potential consequence in this scenario is that the principal may be held liable for any transactions that result from the agent's actions. This is because the third parties relied on the belief that the agent had the authority to act. Estoppel prevents the principal from denying the agent's authority after they have created a false impression of authority. Thus, if the agent engages in a transaction that appears legitimate to a third party, the principal may still be bound by that transaction, even if they later deny the agent’s authority. This protects the interests of third parties and upholds the principle of reliance in agency law.