What does the implied warranty of merchantability do?
If a seller is a merchant, it is warranted that goods must be fit for their ordinary purpose and pass without objection in the trade at the time of sale
When does the implied warranty of merchantability not apply?
If (1) the buyer has examined the goods as fully as the buyer desires, or (2) has refused to examine the goods; then no warranty with respect to defects that an examination would have revealed to the buyer
When is an offer under the UCC irrevocable?
- The offeror is a merchant
- There is an assurance that the offer is to remain open, AND
- The assurance is contained in a signed writing from the offeror
Open for 90 days without assurance as to duration
By what means can a party whose duty is subject to a condition waive the condition?
By either words (promise to waive) or conduct (waiver by performance)
When can a party get compensated for participating in an illegal contract?
When the party (1) didn’t engage in serious misconduct, and (2) is entitled to restitution
It cannot however recover under the contract
When is a court permitted to reform the writing to an express agreement?
- There was a prior oral / written agreement between the parties
- There was an agreement by the parties to put that prior agreement into writing, AND
- There is a difference between the prior agreement and the writing due to mistake of both parties
What is required for proper settlement of debt?
- Forbearance of good faith legal action for an unliquidated debt, OR
- Any Consideration
When can a winning bidder avoid or, take the goods at the price of the last good-faith bid?
When an auctioneer either (1) knowingly accepts a bid by the seller or on its behalf, or (2) procures such a bid to drive up the price of the goods
What are exceptions to the prohibition against an auctioneer accepting a bid by the seller to drive up the price of goods?
- At a forced sale AND
2. If the seller specifically gives notice that it reserves the right to bid
What is a charitable subscription?
A written promise to make a gift to a charity
When is a charitable subscription enforceable?
As soon as it is made because it is enforceable under the doctrine of promissory estoppel without proof that the charity relied on the promise
What is a reserve auction?
The auctioneer may withdraw the goods any time before it announces completion of the sale
What is a no-reserve auction?
The goods cannot be withdrawn after the auctioneer calls for bids on the goods, unless no bid is received within a reasonable time
