Future Business Leaders of America (FBLA) Business Law Practice Exam

Which of the following is true regarding a warranty of merchantability?

1. It guarantees the product is perfect in all respects

2. It assures the product is sold for a specific price

3. It implies that the goods are fit for ordinary use

4. It is valid only for services, not goods

The correct answer is: It implies that the goods are fit for ordinary use

The warranty of merchantability is a legal concept that implies that goods sold by a merchant are of a certain quality and are fit for the general purpose for which they are used. This warranty guarantees that the goods are adequately packaged, labeled, and conform to the promises made on the packaging or labeling, making them suitable for ordinary use. This means that consumers can expect the products to function as intended during normal use without defects. The other options do not accurately reflect the nature of the warranty of merchantability. While perfection in all aspects might be ideal, this level of quality is not guaranteed under the warranty. Additionally, while a product may be sold at a specific price, this does not inherently relate to its merchantability. Finally, the warranty of merchantability specifically applies to goods, not services, making the last option inaccurate.