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 Minnesota, the implied warranty of merchantability is a legal concept that applies to lease transactions for goods, such as office equipment, computers, and vehicles. This warranty implies that the leased goods must meet certain standards to be considered merchantable. They must be fit for the ordinary purposes for which such goods are used, match the description in the lease agreement, and be of consistent quality and quantity within and among units. The goods should also meet the packaging and labeling requirements as specified in the lease agreement and conform to any claims made on their labels or containers. While these are the general expectations, the specific application of the implied warranty of merchantability can be influenced by the course of dealing between the lessor and lessee or the usage of trade within the relevant industry. Minnesota state statutes, along with the Uniform Commercial Code (UCC) as adopted in Minnesota, provide the legal framework for these warranties in lease transactions.