Which elements are required for the implied warranty of merchantability to apply?

• A. The seller must be a merchant; the goods must be fit for ordinary use
• B. The buyer must be a merchant; the goods must be fit for any purpose
• C. The warranty applies only to services
• D. The warranty cannot be disclaimed by 'as is'

Answer: (A)

The key idea is that the implied warranty of merchantability applies in a sale where the seller is a merchant who deals in goods of the kind being sold, and the goods themselves must be fit for ordinary use. That means two things must be present: the seller is acting as a merchant with respect to goods of that kind, and the goods are reasonably fit for the ordinary purposes for which such goods are used.

Why this is the best answer: the seller’s status as a merchant is essential, and the standard of fitness is for ordinary use, not for any special or specific purpose. If a car dealer sells a car and it breaks down in a way that makes it unfit for normal driving, that would typically breach merchantability. It’s not about the buyer’s status (the buyer need not be a merchant) and it’s not about services. Also, the fact that a sale can be disclaimed by “as is” is true under the UCC, so the statement that it cannot be disclaimed is incorrect.

In context, remember the difference from another warranty: there is also a separate implied warranty of fitness for a particular purpose, which requires the seller to know the buyer’s specific purpose and that the buyer relies on the seller’s skill, but that’s a different route from merchantability.