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Apparent agency or apparent authority "arises when the principal
creates by its words or conduct the reasonable impression in a
third party that the agent has authority to act." Guyer v. Haveg
Corp., 205 A.2d 176, 180 (Del. Super. Ct. 1964), affd. 211 A.2d
910 (Del. 1965). If apparent agency or apparent authority is
established, and it is shown that a third party relying on the
apparent authority did so rely in good faith and was justified in
so relying, the principal is bound to the same extent as with
actual authority. Finnegan Constr. Co. v. Robino-Ladd Co., 354
A.2d 142, 144 (Del. Super. Ct. 1976).
Based on our examination of the entire record in this case,
we find that Amax and its successor Cyprus Amax each had both
actual and apparent authority to act on behalf of petitioners'
group in all matters relating to the examination by the IRS of
the consolidated return that was filed by Amax for each of the
years 1984, 1985, and 1986, including the execution of the Forms
872 in question on behalf of the corporations in petitioners'
group. That record amply establishes the indicia of such author-
ity, including those described below.
The Forms 872 in question identified the taxpayers as "Amax,
Inc. and Consolidated Subsidiaries" or "Amax, Inc. and Consoli-
39 (...continued)
those matters is the same in Delaware and New York. Compare
Billops v. Magness Constr. Co., 391 A.2d 196, 197-198 (Del.
1978), with Doxsee Sea Clam Co. v. Brown, 13 F.3d 550, 553 (2d
Cir. 1994), and Carte Blanche (Singapore) PTE., Ltd., v. Diners
Club Intl., Inc., 758 F. Supp. 908, 919 (S.D.N.Y. 1991).
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