Laws vary from state to state but state statutes often provide for the creation of an implied warranty of merchantability by a lessor of goods in a lease transaction—such as for office equipment, computers, telephone systems, heavy machinery, home furniture, motor vehicles, or electronics.
For goods to be merchantable and comply with the implied warranty of merchantability they generally must:
• pass without objection in the trade under the description in the lease agreement;
• in the case of fungible goods, are of fair average quality within the description;
• be fit for the ordinary purposes for which goods of that type are used;
• run, within the variation permitted by the lease agreement, of even kind, quality, and quantity within each unit and among all units involved;
• be adequately contained, packaged, and labeled as the lease agreement may require; and
• conform to any promises or affirmations of fact made on the container or label.
Other implied warranties may be provided by statute or arise from the lessor and lessee’s course of dealing or usage of trade (standard practices and methods in the industry).
In Texas, the implied warranty of merchantability is a legal concept that applies to lease transactions for goods, such as office equipment, vehicles, or electronics. This warranty implies that the leased goods must meet certain standards to be considered merchantable. They must conform to their description in the lease agreement, be of fair average quality if they are fungible, be suitable for their ordinary use, be consistent in quality and quantity within and across units as per the lease, be properly packaged and labeled as required by the lease, and match any claims made on their labeling. Additionally, other implied warranties may arise from the specific course of dealing between the lessor and lessee or from the standard practices in the industry. These regulations are designed to protect lessees by ensuring that leased goods are of a certain quality and are as represented by the lessor. It's important to note that while these warranties are implied by law, they can sometimes be disclaimed or modified by the lease agreement, subject to certain limitations under Texas law.
