Peter planned to open a 50-seat pizza parlor that would also make pizzas for homedelivery service. He asked his sister Angela to make some purchases for his pizza parlor. "First, to fit with the parlor's unique decor, I want you to buy 50 red chairs from the local furniture store, but don't spend more than $10,000 on the chairs. Second, I want you to buy a new electric bicycle for pizza deliveries, but don't spend more than $5,000. Finally, I'd like you to buy from the local restaurant supplier a pizza oven for the pizza parlor, but it shouldn't cost more than $12,000." Angela responded, "I fully understand. Agreed."

That day, Angela went to the local furniture store. She told the salesperson that she wanted to buy 50 red chairs and to spend no more than $10,000. The salesperson responded that red chairs were in high demand and that 50 of them would cost $20,000, but that for $10,000, Angela could buy 50 yellow chairs. Believing that Peter would prefer to stay within the $10,000 budget, even though the chairs were yellow, Angela signed a written contract in her name alone to buy the yellow chairs from the store at that price. Angela did not mention to the salesperson that she was buying the chairs for anyone other than herself or that she had authority to buy only red chairs.

The next day, Angela went to a local bike shop to buy a new electric bicycle, again without mentioning that she was buying the bicycle for anyone else. The bike salesperson truthfully told Angela that she could get a used cargo bike that was not electric, but that could carry more than an electric bike. Believing that Peter would prefer the greater carrying capacity of the cargo bike, Angela purchased it for $8,000, paying with her personal check made out to the bike shop. She immediately rode the bike to Peter, who at first was very annoyed with Angela for purchasing a used cargo bike rather than a new electric bike. But two days later, after trying out the cargo bike, he called Angela and said that he would keep the $8,000 cargo bike because he liked its carrying capacity.

The following day, Peter called the local restaurant supplier in the morning and told the owner, "I am going to open a pizza parlor next month. I have asked my sister Angela to come to your store to purchase a pizza oven on my behalf for the pizza parlor." That afternoon Angela went to the supplier and signed a contract to buy a pizza oven as "Angela, on behalf of Peter." The price for the oven was $15,000, which was a fair price for the pizza oven. The contract specified that the price was payable in full upon delivery. When the restaurant supplier delivered the oven to Peter, he refused to accept delivery or pay the $15,000 purchase price, telling the delivery driver, "Take it back; I don't want it. It's too expensive."