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 Virginia, the concept of an implied warranty of merchantability in lease transactions is recognized and is similar to the provisions found in many other states. This implied warranty ensures that leased goods, such as office equipment, computers, and vehicles, meet certain standards. The goods must be fit for the ordinary purposes for which such goods are used, match the description in the lease agreement, and be of fair average quality if they are fungible. They should also be consistent in quality and quantity within and across units, be properly packaged and labeled as per the lease requirements, and conform to any claims made on their labeling. Additionally, other implied warranties may arise from the history of dealings between the lessor and lessee or the customary practices in the relevant industry. These statutory protections are designed to give lessees confidence that the goods they are leasing are of a certain quality and are suitable for their intended use.