Lori and Shane are engaged in business together. They operate a music store that sells sheet music for most instruments, instruments themselves, and small items relevant to the study of music. Most of their customers are fairly serious students of music, ranging from small children beginning to learn the piano to music students studying at the local university to retired professional musicians. They operate in a partnership, with Lori being responsible for stocking the store, since she is a musician, and Shane taking care of the business details. They operate the store from day to day together, and split the duties entailed in running a retail business equitably.

Recently, Lori and Shane engaged in a joint venture with Peter, who repairs most kinds of musical instruments. Lori and Shane would have someone to whom they could send their customers, and Peter could recommend the store to people who had never shopped there. Each thought that they could increase their profits with this business relationship. They chose to govern their new venture via contract.

Angela is one of Lori and Shane's employees who has power of agency so that she can go to trade shows and purchase new music and instruments. She is not authorized to order from dealers with whom Lori and Shane have never dealt.

Lori and Shane, although currently running the store in a partnership, are thinking about switching from a partnership to incorporation in order to run their business more effectively. They haven't taken any steps to begin the process, however.

Question 3:

Angela attends a trade show and is approached by the representative for a new company that publishes sheet music, who has heard of Lori and Shane's store. The store had never dealt with this company, but Angela thought they had some interesting selections and some unique arrangements for more traditional music, so she decided to enter into a contract on Lori and Shane's behalf for a sizeable order of music. When she returned, Lori and Shane were not happy with her actions. Is Angela personally liable under the contract?