Protecting Your Business Interests from the Pitfalls of Implied Warranties

by Marshal Harold Davis on Apr. 28, 2022

Business Business  Contract Consumer Rights 

Summary: Protecting Your Business Interests from the Pitfalls of Implied Warranties ; Bucks County Economic Development Corporation’s “Bucks Prospectus”

Bucks County Economic Development Corporation’s “Bucks Prospectus”

Protecting Your Business Interests from the Pitfalls of Implied Warranties

Protecting Your Business Interests from the Pitfalls of Implied Warranties

If your business sells goods, you should be aware that there are warranties that are implied in Pennsylvania and many other states, even if you had no intention of selling a product with a warranty attached. This article’s focus is on the sale of goods to other businesses. There are additional responsibilities if your customers are individual consumers. Implied warranties can create a future liability with respect to the product you sell. Some of these implied warranties (and a very basic description) include:

• Warranty of Merchantability & Usage of Trade: Seller has an obligation of good faith and must sell goods that are merchant able. Merchantable goods must conform to certain standards of quality, conformity, fitness, quality, packaging, labeling, etc.
• Warranty of Fitness for a Particular Purpose: Seller is subject to an implied warranty that goods are fit for a particular pur pose if the seller has any reason to know the buyer’s purpose or intended use of the goods and when the buyer relies on the seller’s skill or judgment to select or furnish suitable goods.
• Warranty Against Infringement: Seller must deliver goods free of any rightful claim by any third party by way of infringement.
• Warranty of Condition on Arrival: Seller is subject to addition al warranties regarding the quality, condition, price, and delivery of goods under certain contracts or delivery terms.
• Warranty of Title: Seller must (1) have the right to transfer title; (2) convey good title; and (3) deliver goods from undisclosed security interests, liens, and encumbrances.

• Additionally, a Seller of goods is subject to Federal Minimum Standards for Warranties.

With conscientious contract drafting and adding warranty disclaimers to your product literature, you can disclaim much of the liability from some of these implied warranties. Such disclaimers can reduce the risk and uncertainty of future claims, improve future cash flows, reduce reserves/allowances, and augment the bottom

Of course if your business is purchasing products – whether for its own consumption or for resale – you should be aware of these is sues and your rights. You may negotiate the terms of the contract to include express warranties that protect your interests, while simultaneously eliminating or reducing warranty disclaimers.

Marshal H. Davis is a member of [...]'s Business & Municipal
Finance Section. [...] is a regional law firm with offices in
Morrisville and Doylestown, Pennsylvania and Lawrenceville, New Jersey. The firm
engages in the practice of law in various areas including Business, Municipal and
Tax Free Financing, Real Estate, Employment & Public Sector, Estate, Trusts &
Tax, Commercial Services, and Litigation including Personal Injury.

BCEDC • 2 East Court Street, Doylestown, PA 18901 • 215-348-9031 •

Legal Articles Additional Disclaimer is not a law firm and does not offer legal advice. Content posted on is the sole responsibility of the person from whom such content originated and is not reviewed or commented on by The application of law to any set of facts is a highly specialized skill, practiced by lawyers and often dependent on jurisdiction. Content on the site of a legal nature may or may not be accurate for a particular state or jurisdiction and may largely depend on specific circumstances surrounding individual cases, which may or may not be consistent with your circumstances or may no longer be up-to-date to the extent that laws have changed since posting. Legal articles therefore are for review as general research and for use in helping to gauge a lawyer's expertise on a matter. If you are seeking specific legal advice, recommends that you contact a lawyer to review your specific issues. See's full Terms of Use for more information.