Drafting Agreements?

Understanding Implied Warranties

An agreement may be more than just what you see on its face. Depending on the nature of the transaction, your agreement may be subject to an implied warranty of merchantability or an implied warranty of fitness for a particular purpose. These warranties are not always explicitly stated but are automatically in effect by law to provide protection to buyers.

Implied Warranty of Merchantability

The implied warranty of merchantability is an implied promise that the product will perform as reasonably expected. Essentially, it ensures that the item sold is fit for the ordinary purposes for which it is used. For example, if you purchase a refrigerator, this warranty implies that the refrigerator will keep food at a safe temperature. If the refrigerator fails to do so, it may be considered a breach of the implied warranty of merchantability. Despite not being explicitly mentioned in the agreement, this warranty applies to the sale of goods by merchants. It assures buyers that they are purchasing items that meet a minimum level of quality and functionality. However, it is important

for buyers to note that this warranty generally does not cover defects that are apparent or that should reasonably be discovered through an inspection before purchase.

Implied Warranty of Fitness

The implied warranty of fitness for a particular purpose is an implied promise that the product will perform the duty for which it has been advertised or recommended by the seller. This warranty comes into play when a buyer relies on the seller’s expertise to select a product for a specific purpose. For example, if you inform a seller that you need a boat that can withstand saltwater conditions and the seller recommends a particular model, this warranty implies that the boat will indeed be suitable for saltwater use. For the implied warranty of fitness for a particular purpose to apply, the seller must know that the buyer is relying on their expertise. Additionally, the buyer must have actually relied on the seller’s skill or judgment in making the purchase. This warranty provides an additional layer of protection to buyers who are purchasing products for specialized uses.

Implied Warranties and Service Agreements

It is crucial to understand that implied warranties generally do not extend to service agreements. Buyer beware for service-based agreements, as they are not covered by implied warranties. Implied warranties only apply to the sale of products, not services. This means that the performance expectations in a service agreement must be expressly agreed upon within the contract terms. In service agreements, there is no implied duty of workmanlike performance. Therefore, if you are entering into a service agreement, it is imperative to clearly outline the performance expectations and any necessary standards in the contract. It is recommended to use a knowledgeable attorney to draft or review any service agreement to ensure that your interests are adequately protected.