As fitness enthusiasts, Nicole, Hely and Maxine have each just completed their yoga instructor certifications. They met during the training and have decided to open a yoga studio on Queen Street West in Toronto. They have entered into a General Partnership Agreement for the operation of the yoga studio. The three want to expand the business by entering into agreements with local businesses and work-share spaces to offer on-site yoga classes to their employees or members. Their Partnership Agreement stipulates, among other things, that all partners have to agree to any service agreements entered into on behalf of the Partnership.

Hely sees an opportunity with a nearby tech company where she has a contact with the CEO, Aaliyah. While Nicole and Maxine are travelling, and without their knowledge or consent, Hely signs a service agreement with Aaliyah's company on behalf of the Partnership, to provide the company with 2 separate yoga classes five days a week. When Nicole and Maxine find out about the service agreement, they panic (they are only 3 instructors, and they don't think they have capacity to take on these new sessions - or the money to hire any new instructors) and they immediately contacted Aaliyah, informing her that Hely had no authority to enter into the services agreement on behalf of the Partnership and thus the services agreement would not be going forward. Aaliyah's lawyer has informed Nicole, Hely and Maxine that the services agreement is binding and that each of them will be sued for breach of contract if they do not comply with their contractual obligations.

(A) Nicole, Hely and Maxine are each liable to Aaliyah for breach of contract for failure to provide the yoga sessions provided for in the services agreement. True or false? (1 mark)

(B) Briefly explain your answer, taking care to identify the legal issue and apply the relevant legal test to the facts. (1 mark)

(C) What recourse, if any, might Nicole and Maxine have against Hely in these circumstances? (2 marks)