Contracts Implied Warranty Law and Legal Definition

Under the Uniform Commercial Code (UCC), which has been adopted in some form by almost all states, there are implied warranties in every sales transaction that the goods sold are fit for the ordinary purposes for which such goods are used. This is called the "implied warranty of merchantability". Under the implied warranty of merchantability, the good sold:

  • Are fit for the ordinary purposes for which such goods are used,
  • Would pass without objection in the trade
  • Is adequately packaged, labeled, and contained
  • Conforms to the promises made in the label

There may also be an "implied warranty of fitness for a particular use". This warranty is created when:

  • At the time of sale, the seller has reason to know the uses the buyer has for the goods, and
  • The buyer relies on the seller’s judgment in selecting the goods
  • This implied warranty is not created if
  • The buyer’s knowledge of the goods is as great as the seller, or the buyer has a professional consultant,
  • The buyer supplies specifications to the seller

Implied warranties are part of every UCC contract unless disclaimed by the seller. Implied warranties are often disclaimed, which is legal as long as the disclaimers are conspicuous, such as in bold face print. Warranty disclaimers have been held a material alteration, such that they would not be part of the contract if the term was added in the acceptance. Although a seller cannot disclaim an express warranty, he can disclaim implied warranties.