ABA Family Legal Guide

Contracts and Consumer Law

Types of Contracts

Warranties

What is the implied warranty of merchantability?

When someone is in the business of selling or leasing a specific kind of product, the law requires that the item be adequate for the purpose for which it is purchased or leased. This is the implied warranty of merchantability. This general rule of fairness means that what looks like a carton of milk in the supermarket dairy case really is drinkable milk and not sour or unusable. In many states, the implied warranty of merchantability cannot be disclaimed in a consumer transaction with respect to new and unused consumer goods.

So, to take a car-sale example, if the buyer's purpose is only the ordinary one of general transportation, the implied warranty of merchantability is what assures the buyer or the lessee that the product will work. And that warranty applies if the product does not work, even if great care was taken in its manufacture. For this reason, only a merchant makes this implied warranty. The implied warranty of merchantability doesn't apply to sellers or lessors of cars unless they are in the business of selling or leasing cars.