Implied Warranty on cars and trucks Lawyer Manual

The implied warranty of title

Implied in every sale

Every contract for the sale of a vehicle implies a warranty by the seller that the title is good, and the vehicle is free of any security interest, lien, or other encumbrance.

The warranty extends to a buyer whether or not the seller had the vehicle at the time of sale.

Limits on exclusions or modifications

The warranty is not subject to exclusion or modification under §2-316 but may be excluded or modified only by specific language or by circumstances which give the buyer reason to know that the seller does not claim the title.

The implied warranty of merchantability

Implied in every sale

Whenever the seller is a merchant concerning vehicles, a warranty that the vehicle shall be "merchantable" is implied in every sale.

What is merchantable? 

To meet the test of "merchantable," the vehicle must at least:

• Pass without objection in the trade under the contract description, 
• Be fit for the ordinary purposes for which a vehicle is used, and
• Conform to the promises or affirmations of fact made on the container or label, if any.

Can be excluded

This implied warranty can be excluded or modified under §2-316 with an "as is" clause. Without an "as is" clause, the warranty of merchantability can only be excluded or modified if the language mentions merchantability explicitly, and is conspicuous.

Use in consumer fraud cases

Note that in consumer fraud cases, you may also have a breach of the implied warranty of merchantability.

Example: A vehicle sold with an odometer roll-back would not "pass without objection in the trade" and would thus be unmerchantable.

Used cars

A used vehicle should be in a reasonably safe condition and substantially free of defects that impair its operation. Overland Bond & Inv. Corp. v. Howard, 9 Ill.App.3d 348, 292 N.E.2d 168 (1st Dist. 1972). It should perform up to the level reasonably expected of a car of the same age, mileage, and price.

The implied warranty of fitness for a particular purpose

Reliance on the seller's judgment

If the seller, at time of sale, has reason to know the particular purpose for which the car is required (e.g., cross-country trip), and that the buyer is relying on the seller's skill or judgment to select or furnish a suitable car, there is an implied warranty that the car shall be fit for such purpose.

Particular purpose

Whether or not the car is sold for a "particular purpose" depends on whether the buyer is to put the car to a specific use peculiar to his business or circumstances. It is to be distinguished from ordinary or general use.

Can be excluded

This implied warranty can be excluded or modified under §2-316 with an "as is" clause. Without an "as is" clause, the warranty of fitness can only be excluded or modified if the exclusion/modification is in writing and conspicuous. The language need not mention "fitness" and is sufficient by stating, for example, "There are no warranties which extend beyond the description on the face hereof."