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Business LibreTexts

5.6: Warranties

  • Page ID
    3621
  • What you’ll learn to do: describe warranties

    In this section you will learn about the different types of warranties that are attached to the goods and services that businesses provide.

    learning objectives

    • Define “warranty”
    • Explain express warranties
    • Explain implied warranties
    • Explain the warranties provided by the Uniform Commercial Code

    Warranties

    Photo of neon sign for Erie LaSalle Body Shop. The marquee reads, "Life time warranty, open 6am, free shuttle, www.erielasalle.com"A warranty is a guarantee or promise that provides assurance by one party to another party that specific facts or conditions are true or will happen. Some warranties run with a product, such that a manufacturer makes the warranty to a consumer with whom the manufacturer has no direct relationship. For example, your iPhone came with a warranty, but the people at Apple don’t know who you are. This fact doesn’t negate the warranty that came with your phone, though. A warranty may be express or implied, depending on whether the warranty is explicitly provided (typically written).

    Types of Warranties

    Express Warranties

    Express warranties are just that—expressed in writing. When you purchased a new television set, for example, somewhere among all of the instructions on how to connect it to your Blue-Ray player and Wi-Fi and XBox was a small card that expressly stated what warranty the manufacturer was providing to you as the purchaser.

    Implied Warranties

    Implied warranties are unwritten promises that arise from the nature of the transaction and the inherent understanding by the buyer rather than from the express representations of the seller. In the United States, the Uniform Commercial Code provides that the following two warranties are implied unless they are explicitly disclaimed (such as an “as is” statement):

    • The warranty of merchantability is implied unless expressly disclaimed or the sale is identified with the phrase “as is.” To be “merchantable,” the goods must reasonably conform to an ordinary buyer’s expectations. For example, a fruit that looks and smells good but has hidden defects may violate the warranty if its quality does not meet the standards for such fruit “as passes ordinarily in the trade.”
    • The warranty of fitness for a particular purpose is implied unless disclaimed when a buyer relies upon the seller to select the goods to fit a specific request. For example, this warranty is violated when a buyer asks a mechanic to provide tires for use on snowy roads and receives tires that are unsafe to use in snow.

    The following video explains one’s legal rights under implied warranties.