Implied warranties are promises or guarantees implicitly made by a seller of goods or services—even when they are not included in a contract for the goods or services. Such promises are sometimes said to be "made by operation of law."

For example, the implied warranty of habitability in residential construction focuses on the state of the completed structure. In contrast, the implied warranty of good workmanship in residential construction focuses on the builder’s conduct. These two implied warranties parallel one another, and they may overlap.

For example, a builder’s inferior workmanship could compromise the structure and cause the home to be unsafe. But a builder’s failure to perform good workmanship is actionable even when the outcome does not impair habitability. Similarly, a home could be well-constructed and yet unfit for human habitation if, for example, a builder constructed a home with good workmanship, but on a toxic waste site.

Thus, the implied warranty of habitability is more limited in scope, and protects the purchaser only from those defects that undermine the very basis of the bargain. It requires the builder to provide a house that is safe, sanitary, and otherwise fit for human habitation. In other words, this implied warranty only protects purchasers from conditions that are so defective that the property is unsuitable for its intended use as a home.

As compared to the warranty of good workmanship, the warranty of habitability represents a form of strict liability, because the adequacy of the completed structure governs liability—not the manner of performance by the builder.

The warranty of habitability generally may not be disclaimed. And the warranty of habitability extends only to latent defects—it does not include defects that are known by or expressly disclosed to the buyer—even if they are substantial.

Laws regarding the implied warranty of habitability vary from state to state and are often located in a state's statutes.

In Illinois, the implied warranty of habitability is a legal doctrine that ensures a new home is suitable for living in. This warranty is automatically included in the sale of a new home and cannot be waived by the buyer. It requires that the home be safe, sanitary, and fit for human habitation. If a home is constructed on a toxic waste site, for example, it may be considered uninhabitable regardless of the quality of the construction. The implied warranty of good workmanship, on the other hand, ensures that the builder has performed their work to a reasonable standard. This warranty can be actionable even if the defects do not make the home uninhabitable. In Illinois, the warranty of habitability is a form of strict liability, meaning that the builder is liable for any defects that make the home unsuitable for living, regardless of the builder's efforts or intentions. This warranty typically covers latent defects not known to or disclosed to the buyer at the time of purchase. It is important to note that these warranties are subject to Illinois state statutes and case law, which can provide specific details and interpretations of these warranties.