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After a business relationship breaks down, owners, managers, and outsiders dispute who is bound and who must pay. A seller promised to keep an offer open while the buyer made costly preparations. The disputed action was partly authorized but exceeded an important limitation. The parties disagree about the legal effect of those facts. Which option gives the best analysis?

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The court should resolve the dispute by applying the operative rule to the material facts: The answer should identify the governing rule for Agency Formation and apply it to the operative facts. Assume the doctrine applies because one element appears satisfied, even if the remaining elements are contested. Reject the claim or defense solely because the opposing party disputes a required fact. 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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