Implied warranties are exactly what the term says they are: unspoken and unwritten promises made by a seller to a buyer that the product being sold works. These warranties are created through the application of the law, rather than through statements that are made by a seller. The concept that encompasses the implied warranty comes from common law, specifically, the principle of “fair value for money spent.” Actually, there are two types of implied warranties, both outlined under Article 2 of the UCC.
The implied warranty of merchantability is simply the promise that the product sold is in good working order and will do what it is supposed to do. For instance, a vacuum cleaner is expected to pick up dirt and dust from carpets and floors. A refrigerator is expected to keep food cold. A toaster is expected to toast bread. If the consumer buys a product and the product does not work, then this constitutes a breach of the implied warranty. The seller is required to remedy the problem, whether by repairing or replacing the product. (It should be noted that the section of the UCC covering this type of implied warranty, Section 2-314, is law in every state except Louisiana.)
The implied warranty of fitness for a particular purpose is the promise that the seller’s advice on how to use the product will be correct. For example, it a consumer asks an appliance dealer whether a particular air conditioner can cool a 600 square-foot room and the dealer says yes, that dealer has effectively created a warranty of fitness. In other words, the dealer has impliedly guaranteed that the air conditioner is fit for the purpose for which the consumer needs to use it as expressed to the seller. If the air conditioner can only cool a 400 square-foot room effectively, the dealer has breached the warranty. The idea behind this is that the dealer is expected to know which product will be best for which use.