Question 2- Agency

Stellar has a jewellery store in its hotel lobby called 'Treasure Box'. The jewellery store is owned and operated by Sapphire. Sapphire has one employee, Tiffany. Sapphire wants to expand what the business offers by a Disney collaboration. Together, Sapphire and Tiffany meet with Disney jewellery salesperson, Sebastian.Sapphire explains that she wants to expand her jewellery offering to cater to the increase in young family clientele staying at the Stellar hotel during school holidays. They get some product information and leave.

Sapphire later tells Tiffany, 'I have a $55,000 budget for the new Disney range. I want you to buy Disney jewellery- do not spend more than $55,000.'The following day, Tiffany meets with Sebastian. Sebastian shows Tiffany the new 'Cruella' range. He recommends that Tiffany buy the jewellery pieces which promote the recent movie release telling her that she will not regret the purchase. Tiffanypurchases thejewellery on credit for $80,000and signs the contract, 'Tiffany, on behalf of'Treasure Box'.

When thejewellery is deliveredthat weekend,Sapphire isangry.She says toTiffany: 'I told you that the budget was $55,000 -Treasure Box cannot afford $80,000. I refuse to pay for this.'

When the invoice has not been paid,Sebastian contactsTreasure Box. Sapphire tellsSebastian thatTiffany did not have the authority to purchase thejewellery, and that TreasureBoxwill not pay for it.

Using relevant legal principles of agency law only, discuss whetherTiffany had the authority to purchase thejewellery on behalf ofTreasure Box. WillTreasure Box be required to pay the invoice?