Implied warranty
Encyclopedia
In common law
jurisdictions, an implied warranty is a contract law term for certain assurances that are presumed to be made in the sale of products or real property
, due to the circumstances of the sale. These assurances are characterized as warranties
irrespective of whether the seller has expressly promised them orally or in writing. They include an implied warranty of fitness for a particular purpose, an implied warranty of merchantability for products, implied warranty of workmanlike quality for services, and an implied warranty of habitability for a home.
The warranty of merchantability is implied, unless expressly disclaimed by name, or the sale is identified with the phrase "as is
" or "with all faults." To be "merchantable", the goods must reasonably conform to an ordinary buyer's expectations, i.e., they are what they say they are. For example, a fruit that looks and smells good but has hidden defects would violate the implied warranty of merchantability if its quality does not meet the standards for such fruit "as passes ordinarily in the trade". In Massachusetts
consumer protection
law, it is illegal to disclaim this warranty on household goods sold to consumers etc.
The warranty of fitness for a particular purpose is implied when a buyer relies upon the seller to select the goods to fit a specific request. For example, this warranty is violated when a buyer asks a mechanic to provide snow tires and receives tires that are unsafe to use in snow. This implied warranty can also be expressly disclaimed by name, thereby shifting the risk of unfitness back to the buyer.
Another implied warranty is the warranty of title, which implies that the seller of goods has the right to sell them (e.g., they are not stolen, or patent infringements, or already sold to someone else). This theoretically saves a buyer from having to "pay twice" for a product, if it is confiscated by the rightful owner, but only if the seller can be found and makes restitution.
.
, the obligation is in section 55 of Schedule 2 ("The Australian Consumer Law") of the Competition and Consumer Act 2010 (Cth).
, the obligation is in Article 2, Section 315 of the Uniform Commercial Code
. The warranty of fitness differs from a warranty of merchantability in that it applies to all sellers, not only professional merchants. In the United States, this warranty is sometimes referred to simply as a warranty of fitness.
, the obligation is in Article 2 of the Uniform Commercial Code
(UCC). This warranty will apply to a merchant (that is, a person who makes an occupation of selling things) who regularly deals in the type of merchandise sold.
Under US law, goods are 'merchantable' if they meet the following conditions:
If the merchandise is sold with an express "guarantee", the terms of the implied warranty of merchantability will fill the gaps left by that guarantee. If the terms of the express guarantee are not specified, they will be considered to be the terms of the implied warranty of merchantability. The UCC allows sellers to disclaim
the implied warranty of merchantability, provided the disclaimer is made conspicuously and the disclaimer explicitly uses the term "merchantability" in the disclaimer. Some states, however, have implemented the UCC such that this can not be disclaimed.
can be expressly disclaimed by the use of specific language, such as the words, "as is
" or "with all faults".
, Section 2-316 (1)).
Some jurisdictions, however, limit the ability of sellers or manufacturers to disclaim the implied warranty of merchantability or fitness, such as Massachusetts. (Massachusetts General Laws, Chapter 106: Section 2-316A).
Contractual language can also limit the remedies available for breach of an implied warranty - for example, capping recoverable damages or limiting the remedy to a replacement of a defective item. However, such a term can be found to be unconscionable
. For example, if a defective product causes a personal injury, a contractual provision limiting recovery in such a case will be deemed prima facie
unconscionable. (Uniform Commercial Code, §2-719(3).)
Common law
Common law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...
jurisdictions, an implied warranty is a contract law term for certain assurances that are presumed to be made in the sale of products or real property
Real property
In English Common Law, real property, real estate, realty, or immovable property is any subset of land that has been legally defined and the improvements to it made by human efforts: any buildings, machinery, wells, dams, ponds, mines, canals, roads, various property rights, and so forth...
, due to the circumstances of the sale. These assurances are characterized as warranties
Warranty
In business and legal transactions, a warranty is an assurance by one party to the other party that specific facts or conditions are true or will happen; the other party is permitted to rely on that assurance and seek some type of remedy if it is not true or followed.In real estate transactions, a...
irrespective of whether the seller has expressly promised them orally or in writing. They include an implied warranty of fitness for a particular purpose, an implied warranty of merchantability for products, implied warranty of workmanlike quality for services, and an implied warranty of habitability for a home.
The warranty of merchantability is implied, unless expressly disclaimed by name, or the sale is identified with the phrase "as is
As is
As is is a legal term used to disclaim some implied warranties for an item being sold. Certain types of implied warranties must be specifically disclaimed, such as the implied warranty of title...
" or "with all faults." To be "merchantable", the goods must reasonably conform to an ordinary buyer's expectations, i.e., they are what they say they are. For example, a fruit that looks and smells good but has hidden defects would violate the implied warranty of merchantability if its quality does not meet the standards for such fruit "as passes ordinarily in the trade". In Massachusetts
Massachusetts
The Commonwealth of Massachusetts is a state in the New England region of the northeastern United States of America. It is bordered by Rhode Island and Connecticut to the south, New York to the west, and Vermont and New Hampshire to the north; at its east lies the Atlantic Ocean. As of the 2010...
consumer protection
Consumer protection
Consumer protection laws designed to ensure fair trade competition and the free flow of truthful information in the marketplace. The laws are designed to prevent businesses that engage in fraud or specified unfair practices from gaining an advantage over competitors and may provide additional...
law, it is illegal to disclaim this warranty on household goods sold to consumers etc.
The warranty of fitness for a particular purpose is implied when a buyer relies upon the seller to select the goods to fit a specific request. For example, this warranty is violated when a buyer asks a mechanic to provide snow tires and receives tires that are unsafe to use in snow. This implied warranty can also be expressly disclaimed by name, thereby shifting the risk of unfitness back to the buyer.
Another implied warranty is the warranty of title, which implies that the seller of goods has the right to sell them (e.g., they are not stolen, or patent infringements, or already sold to someone else). This theoretically saves a buyer from having to "pay twice" for a product, if it is confiscated by the rightful owner, but only if the seller can be found and makes restitution.
Fitness for a particular purpose
An implied warranty of fitness for a particular purpose is a warranty implied by law that if a seller knows or has reason to know of a particular purpose for which some item is being purchased by the buyer, the seller is guaranteeing that the item is fit for that particular purpose.International sales law
In international sales law, the obligation is found in Article 35(2)(b) of the United Nations Convention on Contracts for the International Sale of GoodsUnited Nations Convention on Contracts for the International Sale of Goods
The United Nations Convention on Contracts for the International Sale of Goods is a treaty offering a uniform international sales law that, as of August 2010, has been ratified by 77 countries that account for a significant proportion of world trade, making it one of the most successful...
.
Australia
In AustraliaAustralia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
, the obligation is in section 55 of Schedule 2 ("The Australian Consumer Law") of the Competition and Consumer Act 2010 (Cth).
United States
In the United StatesUnited States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, the obligation is in Article 2, Section 315 of the Uniform Commercial Code
Uniform Commercial Code
The Uniform Commercial Code , first published in 1952, is one of a number of uniform acts that have been promulgated in conjunction with efforts to harmonize the law of sales and other commercial transactions in all 50 states within the United States of America.The goal of harmonizing state law is...
. The warranty of fitness differs from a warranty of merchantability in that it applies to all sellers, not only professional merchants. In the United States, this warranty is sometimes referred to simply as a warranty of fitness.
Merchantability
An implied warranty of merchantability is a warranty implied by law that goods are reasonably fit for the general purpose for which they are sold.International sales law
In international sales law, merchantability forms part of the ordinary purpose of the goods. According to Article 35(2)(a) of the United Nations Convention on Contracts for the International Sale of Goods, a seller must provide goods fit for their ordinary purpose.Australia
In Australia, the obligation is in section 54 of Schedule 2 ("The Australian Consumer Law") of the Competition and Consumer Act 2010 (Cth). Each State and Territory now applies the Australian Consumer Law (ACL) as the law of the state. This has created a uniform consumer protection law across the entire country.United States
In the United StatesUnited States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, the obligation is in Article 2 of the Uniform Commercial Code
Uniform Commercial Code
The Uniform Commercial Code , first published in 1952, is one of a number of uniform acts that have been promulgated in conjunction with efforts to harmonize the law of sales and other commercial transactions in all 50 states within the United States of America.The goal of harmonizing state law is...
(UCC). This warranty will apply to a merchant (that is, a person who makes an occupation of selling things) who regularly deals in the type of merchandise sold.
Under US law, goods are 'merchantable' if they meet the following conditions:
- The goods must conform to the standards of the trade as applicable to the contract for sale.
- They must fit for the purposes such goods are ordinarily used, even if the buyer ordered them for use otherwise.
- They must be uniform as to quality and quantity, within tolerances of the contract for sale.
- They must be packed and labeled per the contract for sale.
- They must meet the specifications on the package labels, even if not so specified by the contract for sale.
If the merchandise is sold with an express "guarantee", the terms of the implied warranty of merchantability will fill the gaps left by that guarantee. If the terms of the express guarantee are not specified, they will be considered to be the terms of the implied warranty of merchantability. The UCC allows sellers to disclaim
Disclaimer
A disclaimer is generally any statement intended to specify or delimit the scope of rights and obligations that may be exercised and enforced by parties in a legally recognized relationship...
the implied warranty of merchantability, provided the disclaimer is made conspicuously and the disclaimer explicitly uses the term "merchantability" in the disclaimer. Some states, however, have implemented the UCC such that this can not be disclaimed.
Habitability
An implied warranty of habitability, generally, is a warranty implied by law that by leasing or buying a residential property, the lessor or seller is promising that the property is suitable to be lived in. The warrant of habitability can be breached if there is no heat, hot water, or other essential services. Also, safety issues like no smoke alarm or other fire code issues can be considered to make a dwelling uninhabitable. Also, if the municipality has not issued a certificate of occupancy, it is not legal and is thus uninhabitable. The breach of the implied warrant of habitability can be used to legally break a lease. If the factors have been created or are controllable by the landlord and he has not fixed them despite ample written notification, this situation can also be considered constructive eviction, which allows the tenant to break the lease, but also may allow the tenant to sue for damages in some jursidictions.Disclaimer of an implied warranty
In some jurisdictions, an implied warranty in a sales contractContract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
can be expressly disclaimed by the use of specific language, such as the words, "as is
As is
As is is a legal term used to disclaim some implied warranties for an item being sold. Certain types of implied warranties must be specifically disclaimed, such as the implied warranty of title...
" or "with all faults".
United States
In the United States, a disclaimer must be conspicuous in the contract, e.g., in a different kind of print or font that makes it stand out. On the other hand, express warranty, that is, any affirmation of fact or promise to the buyer, or description of the good, oral or written, can be negated or limited only if such disclaimers are not unreasonable. (Uniform Commercial CodeUniform Commercial Code
The Uniform Commercial Code , first published in 1952, is one of a number of uniform acts that have been promulgated in conjunction with efforts to harmonize the law of sales and other commercial transactions in all 50 states within the United States of America.The goal of harmonizing state law is...
, Section 2-316 (1)).
Some jurisdictions, however, limit the ability of sellers or manufacturers to disclaim the implied warranty of merchantability or fitness, such as Massachusetts. (Massachusetts General Laws, Chapter 106: Section 2-316A).
Contractual language can also limit the remedies available for breach of an implied warranty - for example, capping recoverable damages or limiting the remedy to a replacement of a defective item. However, such a term can be found to be unconscionable
Unconscionability
Unconscionability is a term used in contract law to describe a defense against the enforcement of a contract based on the presence of terms that are excessively unfair to one party...
. For example, if a defective product causes a personal injury, a contractual provision limiting recovery in such a case will be deemed prima facie
Prima facie
Prima facie is a Latin expression meaning on its first encounter, first blush, or at first sight. The literal translation would be "at first face", from the feminine form of primus and facies , both in the ablative case. It is used in modern legal English to signify that on first examination, a...
unconscionable. (Uniform Commercial Code, §2-719(3).)
External links
- The GNU Project's General Public License, a prominent free software license, includes the disclaimer: "Except when otherwise stated in writing the copyright holders and/or other parties provide the program 'as is' without warranty of any kind, expressed or implied, including, but not limited to, the implied warranties of merchantability and fitness for a particular purpose." (all-caps removed, boldface added)