VocabuLaw

Implied Warranty

What is it and what does it mean?

Description of the legal term Implied Warranty:

Implied warranties are legal assurances that apply to goods, services, or property, which are not expressly stated in a contract but are assumed by law to exist in certain transactions. These non-written guarantees arise automatically due to the nature of the transaction or the parties’ relationship. In the United Kingdom, the concept of implied warranties has generally been codified into various laws such as the Sale of Goods Act 1979, the Supply of Goods and Services Act 1982, and the Consumer Rights Act 2015. These statutes imply certain terms into contracts to ensure that transactions meet basic standards of fairness and quality.

One of the primary functions of implied warranties is to bridge the gap between the expectations of the parties and the legal duties that the law considers fair and reasonable to impose. For instance, in a sale of goods, there is generally an implied warranty that the goods are of satisfactory quality, are fit for the purpose for which goods of that kind are usually supplied, and correspond with any description given. If a product fails to meet these criteria, the buyer may have a legal remedy against the seller, such as repair, replacement, or a refund.

The scope and application of such warranties vary depending on whether the buyer is a consumer or another business. The Consumer Rights Act 2015, for instance, provides consumers with a high level of protection by imposing stringent implied warranties. In a business-to-business transaction, however, parties have greater freedom to contract out of statutory implied warranties, provided that it is not unfair or unreasonable to do so.

Implied warranties extend beyond the sale of goods. In the provision of services, there is an implied warranty that the service will be carried out with reasonable care and skill, within a reasonable time, and for a reasonable charge, if not fixed by the contract. Property transactions also come with implied warranties, such as the warranty of quiet enjoyment, which means that the purchaser or renter will not be disturbed in their use of the property.

It is crucial for parties involved in any commercial transaction to be aware of the existence of implied warranties, as they establish a baseline of assurances that one cannot easily disclaim. Such knowledge can inform business decisions and contractual negotiations and can serve as a protective measure should any disputes arise.

Legal context in which the term Implied Warranty may be used:

Consider a scenario where a customer purchases a car from a reputable dealership. The car appears to run smoothly during the test drive and there is no mention of any mechanical issues by the dealer. Two weeks later, the engine fails completely. Despite the absence of a written guarantee, under the Consumer Rights Act 2015, the customer has a legal right to expect that the car is of satisfactory quality, fit for purpose, and as described. Since the car’s engine failed so shortly after purchase, it would imply that the car was not of satisfactory quality at the time of sale. The customer could return the car to the dealership and demand a repair, replacement, or a refund, exercising their rights under the implied warranty of satisfactory quality.

In another instance, imagine a business procures a software package for their new project management system. After installation, they find that the software frequently crashes and is incompatible with their current systems, despite the seller assuring them it would be fit for their specific needs. Here, there is an implied warranty that the software must be fit for the particular purpose the buyer made known to the seller. As the software fails to meet this expectation, the business would likely have a claim against the seller for breach of the implied warranty of fitness for a particular purpose.

Understanding the scope and consequences of implied warranties is essential for enforcing legal rights and fostering trust in commercial exchanges. These non-expressed terms help to ensure that products, services, and property meets fundamental expectations and protect parties from products or services that fall below par. They are a key component of UK commercial law, promoting confidence in transactional integrity and consumer satisfaction.

This website is for informational purposes only and may contain inaccuracies. It should not be used as a substitute for professional legal advice.