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 Utah, as in many states, the law provides for an implied warranty of merchantability in lease transactions for goods, which is applicable to various items such as office equipment, computers, and vehicles. Under this warranty, leased goods must meet certain criteria to be considered merchantable: they must conform to the lease description and be fit for their ordinary use, be of consistent quality and quantity as specified in the lease, and be properly packaged and labeled as required by the agreement. Additionally, the goods must live up to any claims made on their labels or packaging. Utah's statutes may also recognize other implied warranties that arise from the customary practices within a particular industry or from the history of transactions between the lessor and lessee. If a lessor fails to provide goods that meet these standards, they may be in breach of the implied warranty of merchantability. It is advisable for lessees to understand these rights and for lessors to ensure their goods comply with these standards to avoid legal disputes.