Implied Warranties

Implied Warranties

Warranty inferred at law based on the circumstances or nature of the transaction.

Under the UCC, merchants warrant the goods they sell are “merchantable”, i.e., fit for ordinary purpose for which such goods are sold.

Implied Warranty of Merchantability

Automatically arises from merchants.

Goods are of average, fair, or medium-grade.

Adequately packaged and labeled.

Conform to promises on label.

Have a consistent quality and quantity among the commercial units.

Case 23.2: Webster v. Blue Ship Tea Room (1964).

Implied Warranty of Fitness for a Particular Purpose

Arises by any Seller who:

§ Knows the particular purpose for which the goods are being bought; and

§ Knows the buyer is relying on seller’s skill and judgment to select suitable goods.

Implied Warranty Arising from Course of Dealing or Trade Usage

Arises when both parties to a contract have knowledge of a well-recognized trade custom.  Courts infer that both meant this custom to apply to their transaction.