CPA Exam — REG (Regulation)Business LawEasy
A consumer purchases a new smart television from an electronics retailer. The retailer, a merchant, sells the television in its usual course of business. There are no express warranties made by the retailer. Within a month, the television develops a major display defect, rendering it unusable. The consumer seeks to return the television for a refund, claiming a breach of warranty. Under the Uniform Commercial Code (UCC), which implied warranty would the consumer most likely assert?
- AImplied warranty of fitness for a particular purpose.
- BImplied warranty of merchantability.
- CImplied warranty of title.
- DImplied warranty against infringement.
Show answer & explanationAnswer & explanation
Correct answer: B. Implied warranty of merchantability.
The implied warranty of merchantability, which applies to sales by merchants, guarantees that goods are reasonably fit for the ordinary purpose for which they are used. A television with a major display defect failing within a month would breach this warranty.
Why the other options are wrong
- A. Fitness for a particular purpose applies when the buyer relies on the seller's expertise for a specific, non-ordinary use, which is not the case here.
- C. Implied warranty of title guarantees the seller has good title and the right to sell, unrelated to product defects.
- D. Implied warranty against infringement guarantees the goods are free from intellectual property claims, unrelated to product defects.
Implied Warranty of Merchantability
An unstated guarantee, arising in sales by merchants, that goods are reasonably fit for the ordinary purposes for which such goods are used.
- Applies only when the seller is a merchant with respect to goods of that kind.
- Goods must be of fair average quality and pass without objection in the trade.
- Goods must be adequately contained, packaged, and labeled.
Memory trick: M-F-T-I: Merchant, Fitness, Title, Infringement.