Implied Warranty of Merchantability
What is the Implied Warranty of Merchantability?
Under UCC 2-314, a merchant who sells goods impliedly warrants that they are fit for their ordinary purpose, pass without objection in the trade, and conform to any promises on the label.
Source: Henningsen v. Bloomfield Motors, Inc., 32 N.J. 358 (1960)
Definition
The implied warranty of merchantability, codified in UCC section 2-314, automatically arises in every sale of goods by a merchant who deals in goods of that kind. Unlike express warranties, it does not need to be stated or negotiated—it is implied by operation of law. The warranty guarantees that the goods meet a baseline standard of quality: they must be fit for the ordinary purposes for which such goods are used, pass without objection in the trade under the contract description, and be adequately contained, packaged, and labeled.
For the warranty to apply, the seller must be a merchant with respect to goods of the kind sold. A casual or one-time seller is not subject to this warranty. The goods must meet six specific criteria outlined in UCC 2-314(2), including passing without objection, being of fair average quality within the description, being fit for ordinary purposes, being of even kind and quality within units, conforming to label promises, and being adequately packaged.
The warranty can be disclaimed, but only through specific language. Under UCC 2-316, a disclaimer of the warranty of merchantability must mention the word 'merchantability' and, if in writing, must be conspicuous. A general 'as is' or 'with all faults' disclaimer can also effectively disclaim the warranty. Breach of this warranty is one of the most common theories of product liability in commercial transactions and is frequently tested alongside the implied warranty of fitness for a particular purpose.
Key Elements
- 1The seller is a merchant who deals in goods of that kind
- 2A sale of goods has occurred
- 3The goods must be fit for their ordinary purpose
- 4The goods must pass without objection in the trade
- 5The goods must conform to promises or affirmations on the label
- 6The goods must be adequately packaged and labeled
Landmark Cases
Henningsen v. Bloomfield Motors, Inc.
32 N.J. 358 (1960)
Struck down a manufacturer's attempted disclaimer of implied warranties as unconscionable, establishing that implied warranties protect buyers from defective goods.
Webster v. Blue Ship Tea Room, Inc.
347 Mass. 421 (1964)
Addressed the ordinary purpose standard, holding that fish chowder containing bones was merchantable because bones are natural to fish chowder.
Shaffer v. Victoria Station, Inc.
91 Wash. 2d 295 (1978)
Applied the implied warranty of merchantability to a restaurant meal, extending merchant status to food service establishments.
Exam Tips
- Always confirm the seller is a merchant dealing in goods of that kind—a non-merchant seller does not make this warranty.
- Distinguish merchantability (fit for ordinary purpose) from fitness for particular purpose (fit for buyer's specific, unusual use).
- Watch for disclaimer issues: the word 'merchantability' must be used, and written disclaimers must be conspicuous.
- On the exam, analyze both merchantability and fitness for particular purpose when goods fail—they often arise together.
Common Mistakes to Avoid
- Applying the implied warranty of merchantability to non-merchant sellers—it only arises when the seller is a merchant with respect to goods of that kind.
- Confusing merchantability with fitness for particular purpose: merchantability is about ordinary use, fitness is about the buyer's specific, communicated purpose.
- Overlooking valid disclaimer language, especially 'as is' or 'with all faults,' which can disclaim all implied warranties.
Memory Aid
Merchantability = Meets Minimum Market standards. It is fit for what it is normally used for.