FIN 240 Lecture Notes - Lecture 23: Implied Warranty, Inequality Of Bargaining Power, Arbitration
Document Summary
Implied warranty - law derives by inference from the nature of the transaction or the relative situations or circumstances of the parties. Merchantability - every sale or lease of goods made by a merchant who deals in goods of the kind sold or leased automatically gives rise to an implied warranty of merchantability. Merchantable goods - reasonably fit for the ordinary purposes for which such goods are s. Warranty of merchantability may be breached even if merchant did not know or could not have discovered that a product was defective. Serving of food or drinks in a public establishment also has an implied warranty of merchantability. Whether food is fit to eat based on consumer expectations. Implied warranty of fitness for a particular purpose - arises in the sale or lease of goods when a seller/lessor knows both of the following: Particular purpose for which a buyer/lessee will use the goods.
