CLFP Documentation Practice Exam

The two implied warranties that apply when equipment is sold or leased under the UCC are merchantability and fitness for a particular purpose (often phrased as fitness for intended use).

Merchantability means the equipment is of average quality for its kind and fits for the ordinary purpose for which such goods are used. For equipment, this means it should operate as a typical machine of its type would and meet ordinary expectations of quality.

Fitness for a particular purpose kicks in when the seller or lessor knows the buyer has a specific use in mind and the buyer relies on that seller’s or lessor’s expertise to select suitable equipment. In that situation, the goods must be fit for that particular use.

The other options don’t fit because warranty of title and quiet enjoyment pertain to real property, not goods; and there are implied warranties beyond express warranties, so saying there are no implied warranties isn’t correct.