California First-Year Law Students' Exam (Baby Bar) — MCContractsEasy
A manufacturer sells 1,000 units of a product to a retailer. The written contract contains a clause stating, 'Seller warrants that the goods are merchantable.' The products are delivered, but a significant portion of them are defective and unsellable. The retailer sues for breach of warranty. Which type of warranty is the retailer most likely relying upon?
- AImplied warranty of fitness for a particular purpose
- BExpress warranty
- CWarranty of title
- DImplied warranty of merchantability
Show answer & explanationAnswer & explanation
Correct answer: D. Implied warranty of merchantability
The implied warranty of merchantability, which applies to sales by merchants, guarantees that goods are fit for the ordinary purposes for which such goods are used. The contract explicitly states 'Seller warrants that the goods are merchantable,' which is a direct reference to this implied warranty, even though it's stated, it's a recognition of the underlying implied warranty's standard.
Why the other options are wrong
- A. The implied warranty of fitness for a particular purpose applies when the seller knows the buyer's particular use and the buyer relies on the seller's skill/judgment, which is not indicated here.
- B. While the contract uses 'warrants,' the term 'merchantable' specifically invokes the implied warranty of merchantability, rather than creating a new specific express promise about quality beyond fitness for ordinary purpose.
- C. The warranty of title ensures the seller has good title and the goods are free from liens, which is unrelated to product quality.
Implied Warranty of Merchantability
Under the UCC, a warranty implied in a contract for the sale of goods by a merchant that the goods are fit for the ordinary purposes for which such goods are used and are of fair average quality.
- Applies only when the seller is a merchant with respect to goods of that kind.
- Goods must be fit for their ordinary purpose.
- Can be disclaimed, but specific language is usually required (e.g., 'as is').
Memory trick: Goods come with silent promises or loud guarantees.