Gilbert Church owned Church Farm, Inc., a horse breeding farm in Illinois managed by Herb Bagley. Church Farm's advertisements for the breeding rights to one of its stallions, Imperial Guard, directed all inquiries to "Herb Bagley, Manager." Vern and Gail Lundberg contacted Bagley and executed a preprinted con-tract giving them breeding rights to Imperial Guard "at Imperial Guard's location." Bagley handwrote a statement on the contract that guaranteed the Lundbergs "six live foals in the first two years." He then signed it "Gilbert G. Church by H. Bagley." The Lundbergs bred four mares, which resulted in one live foal. Church then moved Impe-rial Guard from Illinois to Oklahoma. The Lundbergs sued Church for breaching the contract by moving the horse. Church claimed that Bagley was not authorized to sign contracts for Church or to change or add terms, but only to present preprinted contracts to potential buyers. The jury found in favor of the Lundbergs and awarded $147,000 in damages. A state appellate court affirmed. Church was bound by Bagley's actions because Church had allowed circumstances to lead the Lundbergs to believe Bagley had the authority. In other words, Bagley had apparent authority to modify and execute the contract on behalf of Church.

Note: Can you please answer this question using IRAC( Issue, Rule of Law, Analysis, and Conclusion) format. Because then it will be easy for me to understand the case a a lot better.