Implied WarrantyDefinition and Examples

Denise Elizabeth P
Senior Financial Editor & Contributor

If you are a business owner, then you may have heard the term “implied warranty” a time or two.

As a business owner, it is important to understand what implied warranty means and why it matters, especially if you are selling goods to consumers.

According to Cornell Law, Implied warranty is a guarantee that is not written down or explicitly spoken.

For example, when you are purchasing a new car from a certified dealership, the implied warranty is that the car runs and drives and is in good working order.

Another example that illustrates the concept of implied warranty is when you order a meal at a restaurant.

The implied warranty is that the food is edible.

In other words, implied warranty means the consumer is expecting what should be expected of the goods provided.

The Uniform Commercial Code (UCC) is what governs the sale of goods.

Their implied warranty of merchantability must at least meet the following:

  • (a) pass without objection in the trade under the contract description; and
  • (b) in the case of fungible goods, are of fair average quality within the description; and
  • (c) are fit for the ordinary purposes for which such goods are used; and
  • (d) run, within the variations permitted by the agreement, of even kind, quality and quantity within each unit and among all units involved; and
  • (e) are adequately contained, packaged, and labeled as the agreement may require; and
  • (f) conform to the promise or affirmations of fact made on the container or label if any.

Implied warranties are what protect consumers from purchasing products that are not accurately represented by the sellers.

When consumers receive defective, or products that were not as described, implied warranty is often the premise used to return these defective products or pursue legal action against the seller.

As a seller, you should be careful to truthfully represent goods for sale in a manner that accurately describes them per the uniform commercial code criteria above.

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  1. Code of District of Columbia "Code of District of Columbia" Page 1 . September 24, 2021

  2. Cornell Law School "Implies Warranty" Page 1 . September 24, 2021