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[Diamond Debacle] Prida Owns Prida's Jewelry Store

Question 79

Multiple Choice

[Diamond Debacle] Prida owns Prida's Jewelry Store. Charla is Prida's top diamond purchasing agent and usually signs promissory notes on Prida's behalf. Unbeknownst to Prida, Charla is considering opening her own diamond business. While at a convention in New York, Charla signs a promissory note with Jirah's Diamonds for the cost of several newly cut stones. Although Prida's Jewelry Store's name does not appear on the note, Jirah is aware that Charla works for Prida's. Charla decides not to quit her job at Prida's and Jirah presents Prida's with the note and demands payment.
-Can Prida's Jewelry be held liable for the note?


A) No, because Prida's name must appear on the note in order to be held liable.
B) No, because Charla intended to quit her job at Prida's.
C) No, because Charla did not write "as an agent of Prida's" on the note.
D) Yes, because Jirah knew that Charla worked for Prida's.
E) Yes, if Charla signed the note truly on behalf of Prida's, then Prida's can be held liable even if not identified on the note.

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