Understanding the Implied Warranty of Merchantability

If you sell a product, you might assume that you’re just automatically selling it as is; that is, that aside from major defects, you, as the seller, have no obligation to make things right to a buyer that buys your product and isn’t happy. But that’s not quite how it works, because of what is known as the implied warranty of merchantability.

What Is the Warranty?

As the word “implies” would lead you to believe, this is a warranty that is built into everything you sell; it is assumed to exist, even if you don’t say or promise it.

The warranty promises the buyer that the product that is purchased, will meet minimum standards of quality and that the items are fit for the purpose that they are designed to serve. The product functions as it is supposed to.

The warranty includes with it a number of promises to the buyer.

One is that the product sold and bought, is fit to be used the way that it is supposed to be used, and the way that it is marketed to be used. The product is about equal to other products just like it that are sold; that is, it isn’t defective, or substandard, when compared to other, similar products of similar makes and models.

Any language on your packaging, also plays a part in the warranty because the warranty of merchantability also promises the buyer that the product will match, perform, or do, what the label on the packaging says the product will do or how it will perform.

If an object is supposed to perform a certain way based on custom or the way the item is used in a particular industry, it must perform that way.

As you can see, the warranty doesn’t guarantee the most perfect item, or that it is the best item the buyer has ever purchased, or that the buyer is totally and completely happy with the purchase; rather, it simply says that the item will perform as promised or intended, and as other similar items perform.

Do You Have to Honor the Warranty?

Many sellers believe that if they don’t promise anything, the warranty doesn’t exist, and the seller’s obligations end at the sale, but that’s just not true.

If a buyer complains that a product they purchased isn’t working or isn’t working the right way, you don’t have to automatically issue a refund, but you do have to pay attention and inspect the goods and make an evaluation of whether or not to issue a refund or make the transaction right for the buyer in some way.

You can expressly disclaim any warranties, including the warranty of merchantability, but that’s on you, if you’re the seller, to have the buyer agree to. Simply saying that a purchase is “as is,” may not be effective. Rather, expressly saying that you disclaim any warranty of merchantability is always a better practice.

Questions about legally selling your products? Call our West Palm Beach commercial litigation attorneys at Pike & Lustig for help with your business law matter.