Merchantability

Merchantability is a legal concept in the United States governed largely by the Uniform Commercial Code (UCC). It is an implied warranty that the goods are fit for the ordinary purpose for which such goods are used, and that they are of fair quality and description. The warranty arises automatically in a sale of goods by a merchant who deals in goods of the kind sold, unless it is disclaimed or excluded.

Under UCC 2-314, merchantability includes four key elements: the goods must pass without objection in the trade; be fit for the ordinary purpose for which such goods are used; be of average or fair quality within any relevant description or labeling; and conform to any affirmations of fact or promises made on the container or label.

Disclaimers may exclude or modify the warranty, but only by conspicuous language, often in writing. Common exclusions include “as is” or “with all faults.” In consumer transactions, some limitations are governed by consumer protection laws, and disclaimers may not eliminate latent defects or misrepresentations that violate other protections.

Merchantability is distinct from, but related to, the warranty of fitness for a particular purpose (which requires that the goods be suitable for a specific use known to the seller). It applies to merchants selling goods of the kind and can coexist with express warranties or be disclaimed; when in effect, it supports remedies such as replacement, repair, price reduction, or damages for nonconforming goods.