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Definition: Merchantable

Merchantable is a characteristic of a good sold in the market which means that the good/product is deemed fit to perform the purpose with which it was supposedly manufactured and sold. For example, a bar soap is considered to be merchantable if it reasonably cleans.

The product must be fit for being sold at the given price i.e. of a certain acceptable and reasonable quality, which includes that it should not be damaged, contaminated, ineffective, adulterated or flawed.

In most countries, merchantability is required by legislation and is imposed upon the retailer or manufacturer. If retailer or manufacturer sells goods which are not merchantable, she may invite legal action from the buyer. In India, the merchantable aspect of goods is covered under The Sale of Goods Act, 1930 Section 16, which states as follows:

Merchantable quality ordinarily means that the goods should be such as would be commercially salable under the description by which they are known in the market at their full value.”

Hence, this concludes the definition of Merchantable along with its overview.


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