1. Except in a finance lease, a warranty that the goods will be merchantable is implied in a lease contract if the lessor is a merchant with respect to goods of that kind.

Terms Used In Iowa Code 554.13212

  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
 2. Goods to be merchantable must be at least such as

 a. pass without objection in the trade under the description in the lease agreement;
 b. in the case of fungible goods, are of fair average quality within the description;
 c. are fit for the ordinary purposes for which goods of that type are used;
 d. run, within the variation permitted by the lease agreement, of even kind, quality, and quantity within each unit and among all units involved;
 e. are adequately contained, packaged, and labeled as the lease agreement may require; and
 f. conform to any promises or affirmations of fact made on the container or label.
 3. Other implied warranties may arise from course of dealing or usage of trade.