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After a business relationship breaks down, owners, managers, and outsiders dispute who is bound and who must pay. A manager signed a supply agreement after receiving mixed instructions from the owner. The facts support the doctrine in part, but a timing problem may limit the requested remedy. The parties disagree about the legal effect of those facts. What is the strongest reason for the likely result?

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Reject the claim or defense solely because the opposing party disputes a required fact. The court should resolve the dispute by applying the operative rule to the material facts: The answer should identify the governing rule for Actual and Apparent Authority and apply it to the operative facts. Resolve the dispute on equitable fairness alone without identifying the governing doctrine or its limits. Treat the formal label attached to the claim or defense as conclusive and disregard facts bearing on the rule's elements.

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