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 Michigan, the implied warranty of habitability ensures that a newly constructed residential property is safe, sanitary, and fit for human habitation. This warranty is a legal doctrine that operates by law, meaning it does not need to be expressly included in a contract to be effective. It holds builders to a standard that the homes they construct must be suitable for living without significant defects that compromise the structure's safety or livability. The warranty of habitability is a form of strict liability in Michigan, focusing on the condition of the completed structure rather than the builder's construction process. It cannot generally be waived or disclaimed by the builder and applies only to latent defects, which are not apparent or disclosed at the time of sale. On the other hand, the implied warranty of good workmanship in Michigan requires builders to perform their work using the skill and care that would be expected from a reasonably competent builder, and it is actionable independently of the warranty of habitability. This means that even if a home is habitable, a builder may still be liable for poor workmanship. The specific applications and limitations of these warranties can be found in Michigan's statutes and case law, and they may be subject to certain time limitations and other conditions.