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 Michigan, the implied warranty of merchantability for leased goods is a legal concept that ensures that leased goods meet certain minimum standards. Under this warranty, 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, maintain consistent quality and quantity within and among units as permitted by the lease, be properly contained, packaged, and labeled as required by the lease, and conform to any affirmations made on the container or label. While specific Michigan statutes may not explicitly detail these requirements for leased goods, they are generally derived from the Uniform Commercial Code (UCC), which Michigan has adopted. The UCC, particularly Article 2A which deals with leases, provides the framework for these warranties. Additionally, other implied warranties may arise from the course of dealing between the lessor and lessee or the usage of trade in the relevant industry. It's important to note that parties to a lease may negotiate the terms of these warranties, and in some cases, they may be disclaimed or modified under certain conditions as allowed by law.