Consumer Warranty Law: 4.2.1.1 Imposed by Operation of Law
The implied warranty of merchantability is the most important warranty in the Code.
The implied warranty of merchantability is the most important warranty in the Code.
Merchantability does not depend on the seller’s personal fault. The implied warranty of merchantability is a “no-fault” or strict liability concept.
The implied warranty of merchantability applies to sellers. “Seller” is defined in section 2-103(1)(d) as “a person who sells or contracts to sell goods.”
Because the implied warranty of merchantability protects a buyer’s reasonable expectations of quality when buying from a professional seller, the warranty arises only when the seller is a merchant with respect to goods of the kind sold in the transaction. Merchant is defined in section 2-104(1) as:
A seller may be a merchant and yet not be a merchant with respect to goods of that kind, if the sale is an “isolated” sale that is incidental to the seller’s main business.50 A bank that routinely sells repossessed cars is a merchant with respect to cars, but may not be a merchant with respect to the isolated sale of a large truck, because the sale of trucks is not the bank’s business.51 An air-conditioning installer who sold one pump in six years is a merchant, but not a merchant with respect to th
Merchantability is a standard of quality and, as such, the concept of merchantability eludes precise definition. The Code does not define merchantable. Instead, section 2-314(2) provides that, to be merchantable, goods must at least meet six criteria:
Goods to be merchantable must be at least such as:
Whether goods are fit for their ordinary purposes depends on what the “ordinary” purposes are and whether the goods are “fit” for those purposes. These determinations are questions of fact.62 The ordinary purposes of goods are determined by the function the goods were designed to perform, their normal use, and their unusual but foreseeable uses.63 In most cases, the issue is straightforward.
To be fit for their ordinary purposes, goods must be of an adequate quality appropriate for those purposes. The words “adequate,” “quality,” and “appropriate” contain the same inherent definitional limitations as the word “merchantability.” Judicial precedent and common sense ideas of reasonableness yield some principles which form a framework for the fitness concept. The basic concept is that the goods must satisfy reasonable consumer expectations.72 Two general principles of fitness for the ordinary purpose are discussed below.
This appendix includes two sample notices which a consumer may use to invoke self-help remedies. The first is a sample notice of rejection or, in the alternative, revocation of acceptance. These remedies are discussed in detail in §§ 8.2–8.4, supra.
The first and most elementary principle of fitness is that the goods must be good enough to be able to do the ordinary job—that is, they cannot be so defective that they cannot do the job.74 A car must be substantially free of defects.75 A manufactured home must be sufficiently free of defects that it can serve as a modern, comfortable dwelling in which to reside and entertain guests without discomfort or embarrassment.76 Inconsistent or erratic performa
The second principle of fitness is that the goods must be able to do the ordinary job with reasonable safety, efficiency, and comfort.87 Cars must be able to operate with reasonable safety on the roads or they are not fit for the ordinary purpose of driving on the road.88 A vehicle’s defective air conditioning system makes the vehicle unmerchantable because of the safety risks of fog forming on the vehicle’s windows and drivers’ potential difficulties breathing.
Used goods are held to the same standard as new goods regarding essential qualities.102 Comment 3 to section 2-314 states that “[a] contract for the sale of second-hand goods, however, involves only such obligation as is appropriate to such goods for that is their contract description.” For used goods, then, one must determine what obligation is “appropriate” for those goods.
Certain objective standards can be used as guides in the determination of whether a product is merchantable. The quality of similar goods, the price, and government standards are all relevant to the fitness inquiry.
Price is relevant to the fitness of the goods. Comment 7 to section 2-314 states: “In cases of doubt as to what quality is intended, the price at which a merchant closes a contract is an excellent index of the nature and scope of his obligation under the present section.” For example, a used car sold with a number of defects may be unmerchantable if the price charged was $14,000, but merchantable if sold for $4000.113
Government and industry standards can be especially valuable to buyers for determining fitness for ordinary purposes.114 Government and industry standards of performance, manufacture, health, and safety are adopted to provide basic protection to buyers and society, and/or to set levels of quality and uniformity for an industry. Goods that do not meet these standards do not provide the basic quality that buyers can reasonably expect.115
The container, package, and label are an integral part of goods. If they are inadequate or inaccurate, the goods may be of no useful value or may even be dangerous.
Another element of merchantability is that the goods must pass without objection in the trade under the contract description.138 This criterion may offer some proof advantages, in that it focuses less on how the product functions and more on how it is received or perceived by the buying public.139 One way of expressing the test is whether a significant segment of the buying public would object to buying the goods.140 In making this determination, t
The implied warranty of fitness for a particular purpose, established by UCC § 2-315, requires the goods to be fit for the buyer’s particular purpose in buying them. This warranty is quite different from the section 2-314 implied warranty of merchantability, although both can and often do exist in the same transaction.149 Each of these UCC implied warranties has a different scope and each provides the buyer with cumulative protection of different interests.
As with the implied warranty of merchantability, the implied warranty of fitness for a particular purpose arises from the strong public policy of protecting reasonable buyer expectations. A seller who has reason to know that the buyer is relying on the seller’s judgment in choosing a product appropriate for the buyer’s needs should be responsible if the product is unsuitable for the job. The warranty protects the buyer’s justifiable reliance on the seller’s conduct.
Because section 2-315 uses the word seller rather than the word merchant, an isolated sale by a private party can give rise to the implied particular purpose warranty.153 Comment 4 to section 2-315 expressly recognizes this: “Although normally the warranty will arise only where the seller is a merchant with the appropriate ‘skill or judgment,’ it can arise as to non-merchants where this is justified by the particular circumstances.” As comment 4 also recognizes, a non-merchant is less likely to have the skill or judgment on which a buyer can
The seller must have reason to know two things at the time of contracting: the buyer’s particular purpose, and that the buyer is relying on the seller to choose goods to satisfy that purpose. The seller will have reason to know when the buyer directly informs the seller of the buyer’s need, and asks the seller to select a product or agrees to buy the product recommended by the seller.
The implied particular purpose warranty most clearly applies when the buyer tells the seller that the buyer needs a product for a specific purpose or to satisfy a specific quality or characteristic. A classic example is Catania v. Brown,170 in which the buyer told the seller that the stucco on the exterior walls of his house was in a “chalky” or “powdery” condition and asked the seller to recommend a paint for the walls.
As the particular purpose becomes less special and more ordinary, the applicability of section 2-315 becomes increasingly unclear as it becomes closer to the section 2-314 implied warranty of merchantability,172 which warrants that the goods are fit for their ordinary purpose.
Most courts that have passed on the question, however, look narrowly to the language of section 2-315 rather than to the policy of the section, and conclude that particular purpose must mean a purpose that is special in some way.187 Courts following this line of cases have held, for example, that buying a car for driving on the highway,188 tires for the same purpose,189 a boat to go on the water,190 o