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An implied warranty of merchantability is an unwritten and unspoken guarantee to the buyer that goods purchased conform to ordinary standards of care and that they are of the same average grade, quality, and value as similar goods sold under similar circumstances.
The warranty of merchantability is based off the idea that the seller is in a better state to know whether a product will perform properly. It encourages merchants to ensure the quality of their products before placing them on the market.
Under the implied category are three major subtypes: the implied warranty of merchantability (only given by merchants), the implied warranty of fitness for a particular purpose, and the implied warranty of title.
According to UCC § 2-314, a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind. An implied warranty of merchantability may be excluded or modified by words or conduct subject to the provisions of UCC A§ 2-316.