Every contract for the sale or lease of goods contains a warranty that the seller or lessor actually owns the property. Courts hold that this warranty is implied if it is not included in the contract, and a seller or lessor cannot disclaim it. The two basic types of sales warranties are express warranties and implied warranties. Express warranties are specific promises made by the seller and include oral representations, written representations, descriptions of the goods or services, representations in samples and models, and prior quality of the goods or services. Puffing, or the seller's exaggerated opinion of quality, does not constitute a warranty.
Implied warranties are warranties that courts assume are implied in sales made by merchants.
A merchant is a person who is in the business of selling the good or service being sold in the contract. All sales contracts made by merchants contain an implied warranty of merchantability. This is a promise that the goods, as they are described in the contract, pass without objection in the merchant's trade, are fit for the ordinary purpose for which they are normally used, are adequately contained, packaged, and labeled, and conform to any promises or affirmations of fact made on the container or label. If the goods are fungible, or easily replaced or substituted, such as grain or oil, the replacement goods must be of fair and average quality, fit for their ordinary purposes, and similar to previous goods delivered in the same contract or previous similar contracts. In some situations a sales contract may include an implied warranty of fitness for a particular purpose.