How Implied Warranty of Merchantability works

On Behalf of | Mar 7, 2019 | Lemon Law |

There are a variety of laws that protect buyers and sellers during a business transaction. Some of these laws cover issues that are spelled out in a contract, while others are more implied. The Implied Warranty of Merchantability (IWM) falls into the latter category. While many have never heard the term used, they have a general understanding of how an IWM works – a common example is a buyer who returns a product they just bought because it does not work. This happens regardless of contract or receipt.

An IWM guarantees that cars or anything else bought was in safe condition, essentially free from defect and performs within the expected parameters unless the seller makes it clear that item purchased is an “as-is” situation. It is also worth noting that the IWM also falls under California’s Lemon Law.

What it guarantees

The implied warranty guarantees the following:

  • Be fit for ordinary or intended use
  • Be uniform to other similar vehicles in quality
  • Pass without objection in a trade
  • Conform to its labels
  • Be adequately labeled and packaged

Of course, reason does enter into the equation. It is inaccurate to compare two of the same model sedans if one was driven infrequently and was immaculately maintained and another was a family car that racked up the miles as it hauled kids, dogs and payloads of sports gear or groceries. The cars would be the same year, but the well-worn vehicle’s engine would be in much different condition, likely close to the state of interior and exterior of the well-worn sedan. In this case, the standards of the trade for the two cars would be different.

Good for used cars

As the above example illustrates, there can be much less uniformity in used vehicles, which is why we have odometers. The Warranty of Merchantability is particularly useful for those buying a used vehicle. Of course, the above guidelines come into play, but it is also the condition of the vehicle at the time of resale. Thus, the family sedan may fetch a decidedly different amount and implied warranty than the beautifully maintained one. Regardless, they still must work as expected based on their condition at the time of the transaction.

Disputes do happen

Many used cars still fetch a considerable amount of money, so it can make sense to contact a Lemon Law lawyer if the used sedan does not meet the Warranty of Merchantability. While each case involves different circumstances, attorneys can provide knowledgeable guidance to quickly and effectively resolve the dispute.