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 Kansas, as in many other states, the Uniform Commercial Code (UCC) provides for an implied warranty of merchantability in lease transactions for goods. This warranty implies that the leased goods must meet certain standards such as being able to pass without objection in the trade, being of fair average quality, fit for the ordinary purposes for which such goods are used, consistent in quality and quantity within each unit and among all units involved, properly packaged and labeled, and conforming to any promises made on the container or label. These requirements ensure that the goods are of a quality that is acceptable in the market and suitable for the purposes for which goods of that type are normally used. Additionally, other implied warranties may arise from the specific course of dealing between the lessor and lessee or the customary practices within the relevant industry. It is important for both lessors and lessees to understand these implied warranties when entering into a lease agreement for goods in Kansas.