Canadian Accredited Insurance Broker (CAIB) Three Practice Exam

Which of the following is an implied warranty under the Sale of Goods Act?

1. Low cost of the product

2. Non-replaceable items

3. Fitness for a particular purpose

4. Product popularity

The correct answer is: Fitness for a particular purpose

The implied warranty of fitness for a particular purpose under the Sale of Goods Act is a crucial concept in consumer protection and commercial transactions. This warranty comes into play when a buyer relies on the seller's expertise to select goods that are suitable for a specific purpose. When the buyer communicates that particular purpose to the seller, there is an expectation that the goods provided will meet those needs. If the goods fail to fulfill this purpose, the buyer has the right to seek recourse, as the seller has effectively assured that the products supplied would be fit for that use. In contrast, other options do not represent implied warranties. The low cost of the product is not an assurance of quality or suitability; rather, it reflects pricing strategies. Non-replaceable items may have special conditions but do not imply any warranty on their functionality or usability. Finally, product popularity does not equate to a guarantee of fitness or quality, as just because an item is popular does not mean it will meet the specific needs of a buyer. Thus, the warranty of fitness for a particular purpose stands out as a critical, legally recognized assurance that promotes fair trading practices.