Also known as: merchantable qualities · merchantability
Written by attorneys · grounded in primary & secondary sources — see below
A standard requiring that goods sold by a merchant be fit for the ordinary purposes for which such goods are used and pass without objection in the trade under the contract description.
Madison Meyers purchased a used sedan from Meridian Motors. The sales contract contained a clause stating only that the vehicle was sold as is. When the engine failed after two weeks of normal commuting, Madison sued for breach. Because the disclaimer never mentioned merchantability or used conspicuous language referencing it, the implied standard of merchantable quality remained in force and Meridian was liable for the defect.
Maria Morales bought a new station wagon from Bloomfield Motors. The car repeatedly stalled on public roads and could not be driven safely. Maria sued under the implied warranty. The court held that the vehicle failed the merchantable quality standard because it was unfit for ordinary highway use despite carrying a trade name.
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Monica Morgan purchased a Bronco II from Ford Motor Company for daily road driving. The vehicle rolled over on a paved highway during normal operation. Monica asserted breach of the implied warranty. The court recognized that merchantable quality extends to reasonably foreseeable uses even if the product was designed primarily for another purpose.
Miles Montgomery contracted with Shell Oil for asphalt paving materials. The delivered product deviated from local trade standards for temperature stability. Miles sued claiming the goods were not merchantable. The court examined course of dealing and trade usage to determine whether the asphalt met the merchantable quality standard under the contract.
Marco Marquez bought software from ProCD in a retail box containing license terms inside. The program failed to perform basic functions expected of merchantable database products. Marco sued for breach of the implied warranty. The court considered whether the enclosed terms could limit the merchantable quality obligation that otherwise attached to the sale.
Ming Ma sued Liggett Group after developing lung disease from smoking its cigarettes. The complaint alleged the product failed merchantable quality because it was unsafe for ordinary consumption. The court examined whether the implied warranty of merchantability applied to the health risks of the product in addition to other tort theories.
Goods must be fit for the ordinary purposes for which such goods are used and must pass without objection in the trade under the contract description. Horizon's currency counters that jammed repeatedly during routine bank use failed this standard. The seller's regular dealings with banks established merchant status that triggered the warranty.
Supporting sources
No. UCC § 2-316(2) requires that any language excluding or modifying the implied warranty of merchantability must mention merchantability and be conspicuous if in writing. A clause stating only as is does not satisfy this requirement and leaves the warranty intact.
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Yes. A manufacturer may be liable for breach of the implied warranty if the product is not fit for an unintended but reasonably foreseeable use. The Bronco II designed for off-road use was still subject to the merchantability standard when it rolled over on paved roads.
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Trade usage helps define the ordinary purposes and acceptable quality level for the goods. Asphalt that deviated from local paving standards for temperature stability was evaluated against those usages to decide if it satisfied merchantable quality.
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…purchase, for example, an automobile under the trade name of ‘Ford’ or ‘Buick’ or ‘Cadillac’ or the like, no implied warranty of merchantable quality could be asserted by the purchaser even though the particular car delivered was in such bad condition, so gravely defective in materials and construction, that it could not be operated at…