Legal Definitions - implied warranty of merchantability

The Uniform Commercial Code (U.C.C.) is a set of standardized laws governing commercial transactions, including sales of goods, adopted by most U.S. states.

An implied warranty of merchantability is an automatic promise that a seller, who regularly deals in a particular type of goods, makes to a buyer. This promise is not explicitly stated or written down; instead, it is created by law when a merchant sells goods. It assures the buyer that the goods are:

• Fit for their ordinary purpose: They can be used for the basic tasks they are designed to perform.
• Of acceptable quality: They meet the general standards of quality for similar goods in the trade.
• Adequately contained and labeled: If packaged, they are properly contained and labeled as the agreement may require.

This warranty arises independently of anything the seller says or does, simply because they are a merchant selling those goods. However, this warranty might not apply to defects that a buyer should have noticed if they fully examined the goods or refused to examine them when given the opportunity.

Here are some examples to illustrate this concept:

• Example 1: Faulty Appliance

  A customer purchases a brand-new coffee maker from a large electronics retailer. After just a few uses, the coffee maker stops brewing properly, consistently leaking water or failing to heat the water to the correct temperature. The electronics retailer is a merchant of such appliances.

  How it illustrates the term: The ordinary purpose of a coffee maker is to brew coffee effectively and without malfunction. If the new coffee maker fails to do this, it is not "merchantable" because it is not fit for its ordinary purpose. The implied warranty of merchantability would likely be breached, allowing the customer to seek a remedy from the retailer.

• Example 2: Unsafe Children's Toy

  A parent buys a new wooden toy for their toddler from a specialty toy store. Within a day of play, a small, sharp piece of wood splinters off the toy, posing a choking hazard. The toy store regularly sells children's toys.

  How it illustrates the term: A children's toy, especially one sold by a merchant, is expected to be safe for its intended use by children. If the toy breaks in a way that creates a dangerous defect, it is not fit for its ordinary purpose (safe play) and falls below the acceptable quality standards for such goods. This would constitute a breach of the implied warranty of merchantability.

• Example 3: Substandard Building Materials

  A contractor purchases a large batch of lumber from a lumber yard for a construction project. Upon delivery, a significant portion of the lumber is found to be warped, riddled with large knots, or infested with pests, making it unsuitable for structural use. The lumber yard is a merchant that regularly sells building materials.

  How it illustrates the term: Lumber sold by a merchant is expected to be of a quality generally acceptable in the construction trade for its ordinary purpose (e.g., framing, decking). If the lumber is severely defective and cannot be used for its intended structural purpose, it is not "merchantable." The implied warranty of merchantability would require the lumber yard to provide lumber that meets the basic quality and fitness standards for construction materials.