Definition
Warranty of Merchantability
A Warranty of Merchantability is an implicit warranty that guarantees that the goods being sold are reasonably fit for the general purposes for which they are sold. This type of warranty is assumed to exist in sales contracts for goods unless explicitly disclaimed by the seller. It ensures that products will perform as expected given their ordinary use.
Examples
-
Appliance Sale: When a consumer purchases a refrigerator, the warranty of merchantability implicitly promises that the refrigerator will keep food cold.
-
Automobile Purchase: If buying a car, this warranty ensures the car is safe to drive and functions according to common expectations of an automobile.
-
Clothing Purchase: For clothing, this warranty implies that the clothes will not fall apart under normal use and care.
Frequently Asked Questions
What is the difference between a Warranty of Merchantability and an express warranty?
An express warranty is explicitly stated, verbally or in writing, and outlines specific promises about the product. A warranty of merchantability is implied and not specifically listed in the sales contract but understood by law to be present in the sale of goods.
Can the Warranty of Merchantability be disclaimed?
Yes, sellers can disclaim this warranty, but they must do so conspicuously – typically with clear written disclaimers.
What are the buyer’s rights if a product breaches the Warranty of Merchantability?
The buyer can seek remedies such as repair, replacement, or refund if the goods fail to meet the obligations set out by the warranty of merchantability.
Does the Warranty of Merchantability apply to used goods?
It can apply, but the scope may be limited depending on the nature of the sale and the condition of the goods.
How long does the Warranty of Merchantability last?
The duration varies by jurisdiction but typically lasts for a reasonable amount of time considering the expected lifespan of the product.
- Express Warranty: A clearly articulated warranty stipulated by the seller, either verbally or in writing.
- Implied Warranty: A warranty not explicitly stated but assumed to exist under the law.
- Warranty of Fitness for a Particular Purpose: A warranty that applies when the buyer relies on the seller’s expertise to select goods for a specific use.
- Merchant: A person or business that regularly deals in the goods being sold and is knowledgeable about those goods.
Online References
- Investopedia: Warranty of Merchantability Explained
- Legal Information Institute: Uniform Commercial Code (UCC) - Warranty of Merchantability
- Federal Trade Commission (FTC): Consumer Rights and Warranties
Suggested Books for Further Studies
- “Warranties and Disclaimers: A New Perspective” by Wolfgang Weitzel
- “Understanding Warranty Law” by Keston Newell
- “Business Law: Text and Cases” by Kenneth W. Clarkson, Roger LeRoy Miller, and Frank B. Cross
Fundamentals of Warranty of Merchantability: Business Law Basics Quiz
### What does a Warranty of Merchantability imply about goods?
- [x] They are fit for the general purposes for which they are sold.
- [ ] They will last for a lifetime.
- [ ] They cannot be returned once sold.
- [ ] They are the highest quality available.
> **Explanation:** The warranty implies that the goods are reasonably fit for their intended general purposes.
### Can a Warranty of Merchantability be disclaimed?
- [x] Yes, if done conspicuously.
- [ ] No, it cannot be disclaimed.
- [ ] Yes, but only verbally.
- [ ] Yes, but only if the goods are used.
> **Explanation:** This warranty can be disclaimed, but the disclaimer must be clear and conspicuous, often in writing.
### Is a Warranty of Merchantability considered an express or implied warranty?
- [ ] Express warranty
- [x] Implied warranty
- [ ] Limited warranty
- [ ] Extended warranty
> **Explanation:** The Warranty of Merchantability is an implied warranty, meaning it is not explicitly stated but assumed under the law.
### Does the Warranty of Merchantability apply to services?
- [ ] Yes, always.
- [ ] No, never.
- [ ] Sometimes, depending on the service.
- [x] No, it only applies to goods.
> **Explanation:** The Warranty of Merchantability specifically applies to goods, not services.
### What should a buyer do if they receive goods that breach the Warranty of Merchantability?
- [ ] Ignore the issue.
- [x] Seek remedies such as repair, replacement, or refund.
- [ ] Contact the manufacturer.
- [ ] Keep using the goods.
> **Explanation:** If goods breach this warranty, the buyer should seek remedies like repair, replacement, or refund.
### Is an express warranty more powerful than an implied Warranty of Merchantability?
- [ ] Yes, always.
- [ ] No, never.
- [x] It depends on the terms specified.
- [ ] Only if stated in the contract.
> **Explanation:** Whether an express warranty takes precedence can vary based on specific contract terms and legal interpretation.
### Does buying from a private seller include a Warranty of Merchantability?
- [ ] Yes, always.
- [ ] No, never.
- [x] Not typically, unless explicitly agreed.
- [ ] Yes, but only on certain goods.
> **Explanation:** Usually, private sales do not include an implied Warranty of Merchantability unless expressly stated.
### How is a Warranty of Merchantability established in a sale contract?
- [x] It is automatically implied unless disclaimed.
- [ ] It must be explicitly written.
- [ ] It requires a verbal agreement.
- [ ] It involves a third-party verifier.
> **Explanation:** This warranty is automatically implied in most sales contracts unless it is conspicuously disclaimed.
### Why is a Warranty of Merchantability important for consumers?
- [ ] It raises prices.
- [x] It ensures product reliability.
- [ ] It benefits manufacturers.
- [ ] It limits consumer rights.
> **Explanation:** This warranty is crucial for consumers as it ensures the reliability and expected performance of purchased goods.
### How can a seller properly disclaim a Warranty of Merchantability?
- [ ] By verbally informing the buyer.
- [ ] By increasing the price.
- [ ] By including a clear written disclaimer.
- [x] By including a clear written disclaimer that is conspicuous.
> **Explanation:** To properly disclaim this warranty, the seller must provide a clear and conspicuous written disclaimer.
Thank you for diving deep into our detailed overview and tackling our challenging quiz on the Warranty of Merchantability. May this knowledge serve you well in your business law endeavors!
