Prof. Bill Long 3/1/05
Introducing the Implied Warranty of Merchantability
The implied warranties are discussed in 2-314 and 2-315. Even though every new product may not come with express warranties, all new products come with implied warranties. In addition, we will find that implied warranties also attach to used goods, though the test for what that warranty actually amounts to is not very specific. The purpose of this page is to introduce 2-314. The next page will give some examples and refine our treatment.
An Overview of 2-314
2-314 is divided into three sections. The first stresses two point: (1) that the strict or narrow definition of merchant applies and (2) that restaurant meals are covered under this section. We need to pause for a moment on the first point. You recall from our initial treatment of "merchant" under 2-104 Cmt 2 that there were narrow and broad definitions of merchant under Article 2. Almost everyone is a merchant for purposes of the SoF (2-201), modifications (2-209) and some other sections, while only those who deal in goods of the kind are merchants under 2-314. This means that if you sell your business goods to someone, there is no implied warranty of merchantability (unless, however, if you are a merchant in this kind of goods).
The second section of 2-314 gives a six-pronged definition of merchantable goods. These sections can really be collapsed to five (with a and b being considered together), but the bulk of the litigation on 2-314(2) centers on (b)-(d). While urging you not to ignore (e) and (f), I will focus here on (b)-(d). A product is merchantable if:
"(b) in the case of fungible goods, are of fair average quality within the description; (c) are fit for the ordinary purposes for which such goods are used; and (d) run, within the variations permitted by the agreement, of even kind, quality and quantity within each unit and among all units involved..."
You might want to develop names for each of these subsections in order to fix them in your memory. For example, (b) might be called "fair average quality," while (c) may be known as the "ordinary purpose" prong and (d) is concerned with "even kind and quality."
Comments 7-9 try to focus in on what these statutory sections mean. Cmt. 7 is most illuminating. While it says that "fair average quality" is a term directly appropriate to agricultural bulk products, we can see it has application beyond that sphere. It refers to goods "centering around the middle belt of quality, not the least or the worst that can be understood in the particular trade by the designation, but such as can pass 'without objection.'" There may be a "fair percentage" of the least but the goods are not "fair average" if they are completely composed of the least that would be acceptable under this section. However, the last sentence of the Cmt shouldn't be missed. "In cases of doubt as to what quality is intended, the price at which a merchant closes a contract is an excellent index of the nature and scope of his obligation under the present section."
This Cmt is helpful, I think, because its philosophy mirrors the philosophy of the entire section 2-314. You cannot expect perfection from products but if you pay more for them, you can expect it to be of higher quality and can therefore have higher demands of the product/merchant. This is a common-sense test, to be sure, but it is nice to see that the law tends to confirm common sense in this instance.
Cmts 8-9 are less helpful in expositing the meaning of (2)(c) and (2)(d). Fitness for ordinary purpose is only defined by the Cmt as follows: "Fitness for the ordinary purpose for which goods of the type are used is a fundamental concept of the present section." I think the two most helpful ways to get at what the concept of "ordinary purpose" means is to contrast 2-314 with 2-315 and to isolate a rule emerging from a few cases under 2-314(2)(c).
Though the next mini-essay will go into those two ways in more detail, let's close this essay by saying that "ordinary" is to be contrasted with "particular purpose" of 2-315 and to be understood in light of that provision, while "ordinary purpose" according to the case law focuses on the consumer's reasonable expectations of use of the product. Let's take a brief detour, then, to 2-315 and then return to the rest of 2-314.
Copyright © 2004-2007 William R. Long