Also known as: merchantability standards · warranty of merchantability · implied warranty of merchantability
Written by attorneys · grounded in primary & secondary sources — see below
The quality level that goods must satisfy to fulfill the implied warranty of merchantability in a sale by a merchant. Goods meet this standard when they pass without objection in the trade under the contract description, are fit for the ordinary purposes for which such goods are used, and conform to any promises or affirmations on the container or label.
Meridian Motors sold a used truck to Michael Miller under a contract that stated only 'sold as is' in ordinary print. Miller later discovered the truck could not reliably hold oil pressure during normal highway driving. Because the disclaimer never mentioned merchantability and was not conspicuous, the court held the implied warranty remained in force and the truck failed the merchantability standard.
Maria Morales bought a sport-utility vehicle from Magnolia Motors that rolled over on a paved road while she swerved to avoid an animal. A jury found the vehicle was not defective under strict products liability, yet Morales prevailed on her warranty claim. The court explained that the merchantability standard can be breached even when the goods are not defective if they prove unfit for reasonably foreseeable ordinary driving uses.
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Midwest Airlines purchased database software from a vendor that included a shrink-wrap license limiting use to one computer. After installation the software repeatedly crashed during routine flight-planning operations. The court treated the license as part of the contract and measured merchantability against the ordinary business-use expectations created by the transaction, finding the software failed the standard.
Melanie Morris bought a new car from Monarch Motors under a purchase order containing a warranty disclaimer in small print on the back. The steering mechanism failed during ordinary city driving, injuring Morris. The court refused to enforce the disclaimer because it was not conspicuous and did not mention merchantability, leaving the merchantability standard intact and allowing recovery.
The warranty arises automatically when a merchant sells goods of the kind. It does not require an express statement in the contract.
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The exclusion language must mention merchantability and, if in writing, must be conspicuous. General phrases such as 'as is' may suffice only if they clearly call the buyer's attention to the exclusion under the circumstances.
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No. The merchantability standard and the defect standard are not identical. Goods may satisfy one test yet fail the other when used in reasonably foreseeable ways.
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They must pass without objection in the trade under the contract description, be fit for ordinary purposes, run within permitted variations, and conform to any container or label affirmations.
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…negligence counts were 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…