Paula owns Paula's Plumbing. Her business has traditionally focused on the manufacturing of small plumbing parts used in residential housing. Paula employs several staff members who help operate the business, including two sales employees. One of her best employees is Alan, her senior product manager and an agent of Paula's Plumbing for purposes of agency law. 

Paula has decided that this year she is going to convert her small plumbing parts business into a manufacturer of plastic no-maintenance residential fencing because it is a very popular product and the raw materials for building such fencing are the same as those used for constructing small plumbing parts. Paula calls Alan into her office to tell him her plan, and then Paula says to Alan, "I know that we don't yet have the proper equipment to make the fencing. Can you please begin contracting with whatever third parties you need so that we have the proper manufacturing equipment here within the next three months?" Alan says, "Of course! I will get right on it." 

Several weeks later, Paula is interviewed by a local journalist about her plans to restructure her business. The journalist explains that plastic no-maintenance fencing has been shown to be harmful to the environment, and the journalist asks what Paula's plans are to deal with this issue. Paula responds, "You know, I had no idea about any environmental concerns. Now that you've explained it to me, I have officially decided—and you can print this—to cancel my plans for converting Paula's Plumbing to residential fencing." Before Paula has a chance to speak to Alan, Paula's quote is published online that day and printed in the local newspaper the next morning. Two days earlier, however, Alan entered into a contract with Todd's Terrific Assembly Lines to purchase 5 new assembly lines specifically for the manufacturing of plastic no-maintenance residential fencing.

Before Paula's environmental impact quote is published, word has already gotten around the local community that Paula's Plumbing may be selling a new plastic no-maintenance residential fencing product. Thomas, a resident of the local community, receives a call on his cell phone one day from a local number he does not recognize. Bored at the moment, Thomas picks up the call. The caller introduces themselves as Jack, a sales employee of Paula's Plumbing, and then Jack breaks into an impressively detailed discussion of the company's plans for converting their business from small plumbing parts to fencing. Jack says that if Thomas is interested in getting one of the first fences produced by Paula's Plumbing, Thomas just has to sign a contract with the company and provide a down payment of $500. Thomas says he is very interested, and he tells Jack his email address. Jack tells Thomas where he can send the $500. Thomas later receives an email from Paula with an official looking contract that includes the same "Paula's Plumbing" header that he is familiar with from prior purchases he has made from the company. Thomas signs the contract and sends it back to Jack, along with $500 in cash as a down payment. Several days later, Thomas receives a standard marketing email from Paula's Plumbing that includes some deals on their current products. Thomas notices the email address ends in "paulasplumbing.com," which is different from the email he received from Jack. Alarmed, Thomas calls Paula's Plumbing's official phone number and learns that the company has no employees named Jack and that any communications Thomas would have received from the company were fake because no one has been making any sales calls for plastic no-maintenance fencing orders. 

Is Paula's Plumbing bound by the contract Alan entered into with Todd's Terrific Assembly Lines? 

Is Paula's Plumbing bound by the contract entered

Answer rating: 100% (QA)

Paulas Plumbing is likely bound by the contract Alan entered into with Todds Terrific Assembly Lines ... View the full answer