Implied Warranty of Merchantability Law and Legal Definition

An implied warranty is a contract law term for certain assurances that are presumed in the sale of products or real property. It arises from a transaction. It is the inherent understanding by the buyer, rather than from the express representations of the seller. 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. Implied warranty of merchantability is an unwritten and unspoken guarantee to the buyer that goods purchased conform to ordinary standards of care. Under such warranty of merchantability, the goods 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 conforms to the promises made in the label. The policy behind the implied warranty of merchantability is to motivate the seller to ensure the product's proper performance before placing it on the market.