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What implied warranties arise under Michigan contract law?

Michigan residents enter into agreements with one another on a daily basis. In the business world, these agreements are often reduced to written contracts, in order to specify the terms to which the parties agree, and minimize potential disputes in the future.

While written contracts are prevalent, it is important to realize that they may not be necessary in order to give rise to legal claims between parties. For instance, oral contracts can be just as enforceable as written contracts, to the extent the parties are able, by law, to enter into an oral agreement.

In addition, there are certain provisions of Michigan contract law that can apply for certain contracts, like those involving the sale of goods by a merchant. Under the statute, a warranty is implied in a contract that the goods sold are merchantable, unless the parties exclude or modify this warranty.

This means the goods must pass without objection in the trade, and be fit for the ordinary purposes for which the goods are used. The goods must also be adequately contained, packaged and labeled, and conform to the promises made on any container or label.

There also may be other implied warranties that can arise from the course of dealing between the parties. Accordingly, if the parties have a certain way of transacting with one another in the past, that could be used against a party in the future if it does not live up to that course of dealing.

Ultimately, businesses should understand that the written contract they have may not be the only thing that can give rise to liability. Under certain circumstances, implied warranties or other issues may arise by statute, and these warranties can result in liability to a similar extent as a breach of the written contract.

Source: Michigan Legislature "440.2314," accessed on April 30, 2016

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