Implied Warranty

What Is an Implied Warranty?

An implied warranty is a legal term for the assurances that a product is fit for the purpose that it is intended and that it is merchantable, i.e., conforms to an ordinary buyer’s expectations. The warranty of merchantability is implied unless expressly disclaimed by name, or the sale is identified with the phrase "as is" or "with all faults.” In general, an implied warranty is the assumption that a product will work as it is meant to.

Key Takeaways

  • An implied warranty is an assurance that a product is fit for its intended purpose and meets the buyer's expectations.
  • These implied warranties can be written or oral. 
  • Implied warranties are governed by state laws, not federal laws. 
  • The two key types of implied warranties are merchantability and fitness. 
  • Merchantability says that a product will meet reasonable expectations of the buyer, while fitness means the product meets the buyer’s intended use. 

How an Implied Warranty Works

To protect consumers, products and services come with an implied warranty, whether or not there’s a written warranty. This guarantee is in addition to any express warranty provided at the time of sale and includes the implied warranty of workmanlike quality for services, implied warranty of habitability for a home, and the warranty of title that gives the seller the right to sell the goods.

For example, fruit that looks fresh but has hidden defects would violate the implied warranty of merchantability. All the food in a grocery store has an implied warranty as consumers assume it is fresh and edible—which is why they get a refund if it is not.

Protection Laws

Marking items “sold as is,” or using similar terms, does not free a retailer from implied warranties in several states. Implied contracts, including implied warranties, are enforced by U.S. law. These are governed by state laws, where implied warranties are unwritten, and thus not covered by federal law.

Meanwhile, written warranties are protected via the federal Magnuson-Moss Warranty Act and covered by federal law. Many of these state laws require four years of coverage, while others require they only last as long as any express warranty.

Types of Implied Warranties 

Merchantability 

The implied warranty of merchantability means the goods are merchantable and conform to a reasonable buyer’s expectations. Most consumer products have an implied warranty of merchantability. This warranty makes the assumption that a good or product works for its intended purpose. It applies not just to new items, but to used items as well.  

Fitness

The warranty of fitness means a product is guaranteed for a specific purpose. This type of implied warranty is below the merchantability warranty. For example, if you tell a salesman you want a saw for cutting metal and it turns out it won’t cut through metal, you may return the item under the implied warranty of fitness. 

With the warranty of fitness, the good or product works fine, but it does not meet the buyer’s intended use. The warranty of fitness is implied via a salesperson’s recommendation or assurance of a product for a specific purpose. 

What Is an Example of an Implied Warranty?

An example of an implied warranty is an assumption that the product that you buy will work. For example, if you purchase a washing machine, the assumption is that the washing machine will work and wash your clothes. If you buy a sandwich from a deli, the implied warranty is that the sandwich is edible.

What Is the Difference Between an Implied Warranty and an Express Warranty?

An express warranty clearly lays out the terms of the warranty, either orally or written. An implied warranty is one that already exists based on the assumption of the buyer that the product or service will do what it is intended to do. Implied warranties are the most simple form of protection whereas express warranties provide more protection.

What Are the Common Types of Warranties?

The most common types of warranties are implied warranties, express warranties, extended warranties, and special warranty deeds. Each type of warranty provides a different level of protection to the buyer should the product they purchase fail. Consumers can purchase warranties or extended warranties depending on the product. A special warranty deed is most often associated with real estate transactions.

Article Sources
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  1. Federal Trade Commission. "Businessperson's Guide to to Federal Warranty Law."

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