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 Hawaii, as in many other states, the implied warranty of merchantability is a legal concept that applies to lease transactions for goods such as office equipment, computers, telephone systems, heavy machinery, home furniture, motor vehicles, or electronics. This warranty implies that the leased goods must meet certain standards to be considered merchantable. Specifically, the goods must be able to pass without objection in the trade under the lease agreement's description, be of fair average quality if they are fungible, be fit for the ordinary purposes for which such goods are used, have consistent quality and quantity as specified in the lease, be properly contained, packaged, and labeled as required by the lease, and conform to any affirmations made on the container or label. 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 (usage of trade). It's important for both lessors and lessees in Hawaii to understand these requirements to ensure compliance with state statutes regarding the lease of goods.