Lori and Shane met at a jewellery workshop 5 years ago and decided to go into business together when it became clear tha

[answerhappygod]

Lori and Shane met at a jewellery workshop 5 years ago and
decided to go into business together when it became clear that they
both shared a passion for the decorative arts. Since then, they
have been operating a small jewellery shop where they sell
commercially produced items, and unique custom pieces designed by
Lori. While the jewellery design is Lori’s responsibility, Shane
oversees the day-to-day running of the business. They have both
contributed equally to the business and split the profits. They do
not have a partnership agreement. With business booming in the last
two years, Lori and Shane have hired Stacey as their store
employee. Stacey has been a reliable and trustworthy employee and
has shown repeatedly to have a real “knack” for identifying what
the customers want. As a result, Lori and Shane have sent Stacey to
the jewellery trade show in New York to buy some product for the
store but her instructions are clear: She is not to order from any
dealers with whom the shop has never done business and she cannot
spend more than $10,000 on one order. She has $100,000 to spend. At
the trade show, Stacey happens to run into her friend Peter who is
dealing in fine stones. Peter has a spectacular pink diamond for
sale that Stacey knows will absolutely sell once in the shop. The
problem is that Lori and Shane have never dealt with Peter and that
the diamond’s price is $50,000. Stacey is convinced that this is a
great opportunity for her to impress her employers and goes ahead
with the purchase. Once back at the shop, Lori and Shane are
furious with Stacey’s purchase and refuse to pay the invoice.
• What is the legal issue? • What is the legal test? • Arguments
for the plaintiff? • Arguments for the defendant?