Also known as: fit for ordinary purposes · merchantability · UCC 2-314
Written by attorneys · grounded in primary & secondary sources — see below
A standard for merchantable goods under the implied warranty of merchantability requiring that the goods perform the functions for which they are commonly bought and sold.
Dawn Financial bought ten currency counting machines from Horizon Fund for use in its busy branches. The machines jammed repeatedly when loaded with standard bills during normal daily operations. Dawn sued Horizon for breach of the implied warranty of merchantability. The repeated jamming showed the machines were not fit for the ordinary purposes for which such goods are used.
Horizon Fund sold currency counters to Dawn Financial under a contract containing a clause stating there are no warranties beyond the description on the face of the agreement. The clause mentioned merchantability and appeared in bold capital letters. Dawn later discovered the machines jammed during ordinary use. The conspicuous language mentioning merchantability excluded the warranty that the machines be fit for the ordinary purposes for which such goods are used.
Select any source to read its text and confirm it supports the definition.
Tenants in an apartment building complained that the units lacked adequate heat and contained exposed wiring. The landlord argued the leases contained no express promises about condition. The court applied the principle that goods and services must meet ordinary expectations. The apartments failed to be fit for the ordinary purposes for which such goods are used.
A smoker sued a tobacco company after developing lung cancer from using the product. The company pointed to federal labeling requirements as limiting state claims. The court examined whether the cigarettes met ordinary consumer expectations. The analysis turned on whether the product remained fit for the ordinary purposes for which such goods are used despite the warnings.
A buyer purchased a sport utility vehicle advertised for both on-road and off-road use. The vehicle rolled over during ordinary highway driving. The buyer sued the manufacturer claiming the vehicle did not meet merchantability standards. The court considered whether the vehicle was fit for the ordinary purposes for which such goods are used.
A buyer purchased software containing a shrink-wrap license restricting use after opening the package. The buyer used the software in violation of the license terms. The seller sued for breach of contract. The court examined whether the software remained fit for the ordinary purposes for which such goods are used despite the additional license restrictions.
The test asks whether the goods perform the functions for which they are commonly bought and sold in the trade. Courts focus on the ordinary daily use of the product rather than specialized or unusual applications. Goods that jam or fail during routine operations typically fail this standard.
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A writing that mentions merchantability and is conspicuous can exclude or modify the warranty. The disclaimer must be clear enough to call the buyer's attention to the exclusion. Language such as there are no warranties which extend beyond the description on the face hereof satisfies the requirement when conspicuous.
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Courts have extended the concept to leases and to residential leases by analogy to the implied warranty of merchantability. The standard ensures that leased goods or housing units meet the basic functions buyers or tenants reasonably expect. This extension protects parties who rely on the skill of suppliers in modern transactions.
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…dismissed by the court and the cause was submitted to the jury for determination solely on the issues of implied warranty of merchantability. Verdicts were returned against both defendants and in favor of the plaintiffs. Defendants appealed and plaintiffs cross-appealed from the dismissal of their negligence claim. The matter…