- The Sale of Goods Act applies to contracts for the sale of "goods" — tangible, movable property — as opposed to services, real estate, or intangible rights.
- A common misconception is that these warranties only apply if a contract specifically mentions them.
- Confirm whether your transaction is a sale of goods, a supply of services, or a mix — this affects which rules apply.
If your Ontario business sells physical products — to consumers, to other businesses, or both — a set of legal promises attaches to that sale automatically, whether or not your invoice, quote, or contract says a word about them. These come from Ontario's Sale of Goods Act, a long-standing statute that implies certain basic conditions and warranties into most sales of goods. Understanding what it actually promises your customers is the first step to managing that risk sensibly.
This article walks through what the Sale of Goods Act implies into a typical sale, in plain language, without the legal jargon.
What the Sale of Goods Act Covers
The Sale of Goods Act applies to contracts for the sale of "goods" — tangible, movable property — as opposed to services, real estate, or intangible rights. Many transactions mix the two (a manufactured product installed by the seller, for example), and where the line falls between "goods" and "services" in a mixed contract can matter a great deal to which rules apply.
The Act implies certain conditions and warranties into a contract of sale by default. Some of the best-known are described below in general terms — the exact language and scope can vary depending on the specific facts of a sale, so treat this as an orientation, not a checklist to rely on without legal advice.
Title
There is an implied promise that the seller actually owns the goods being sold (or has the right to sell them) and that the buyer will get quiet possession, free of undisclosed claims by third parties.
Correspondence with description
Where goods are sold by description — as is common in most commercial sales, from a catalogue, spec sheet, or online listing — there is an implied promise that the goods delivered will actually match that description.
Merchantable quality
Where a seller sells goods in the course of its business, there is generally an implied condition that the goods are of reasonably acceptable, merchantable quality — free from defects that would make them unfit for the ordinary purposes for which such goods are used. This implied condition can be limited or excluded in some circumstances, including where the buyer has had a genuine opportunity to examine the goods and the examination ought to have revealed the defect.
Fitness for a particular purpose
If a buyer makes known to the seller a particular purpose for which the goods are required, and relies on the seller's skill or judgment to supply something suitable, there is generally an implied condition that the goods will be reasonably fit for that purpose.
Sale by sample
Where goods are sold by reference to a sample, there is generally an implied promise that the bulk of the goods will correspond with the sample in quality.
Why This Matters Even If Your Contract Is Silent
A common misconception is that these warranties only apply if a contract specifically mentions them. The opposite is true: they are implied by law into the sale unless the contract validly excludes or modifies them. A seller who never thought about these implied terms may still be bound by them — and a buyer who never negotiated for them may still be able to rely on them.
This is one reason a clear set of written terms of sale matters for any business that sells products regularly. Terms that are silent on warranties don't avoid the implied ones; they simply leave the default rules in place, for better or worse.
Practical Steps for Sellers
- Know what you're actually selling. Confirm whether your transaction is a sale of goods, a supply of services, or a mix — this affects which rules apply.
- Be careful with descriptions and specifications. Marketing language, spec sheets, and sales conversations can all become part of what the goods are supposed to match.
- Understand what "merchantable quality" realistically means for your product. A defect that would be trivial for one type of product may be significant for another.
- Document any pre-sale inspection. If a buyer inspects goods before purchase, keep a record — it can be relevant to whether certain implied conditions were reduced or excluded.
- Review your written terms of sale. If you want to limit or exclude any of these implied warranties, the language needs to be clear and appropriately drafted — see our companion article on disclaiming implied warranties for more detail.
Frequently asked questions
Does the Sale of Goods Act apply to services, like consulting or repair work?
Generally, no — the Act is aimed at sales of goods (tangible property), not pure services. Many real-world contracts combine goods and services, and how a mixed contract is characterized can affect which legal rules apply, so this is worth confirming with a lawyer for anything beyond a straightforward product sale.
Does the Sale of Goods Act apply to sales between two businesses, or only to consumers?
It generally applies to sales of goods regardless of whether the buyer is a consumer or another business, though some other consumer protection rules apply only to consumer transactions and not to B2B sales.
Can a seller simply say "as is, where is" and avoid all implied warranties?
Some implied warranties can be limited or excluded by clear contractual language in some circumstances, but "as is" language does not automatically eliminate every possible claim, and some exclusions won't be enforceable depending on the transaction. This is a drafting question that benefits from legal review rather than a stock phrase.
How long does a buyer have to bring a claim over defective goods?
Claims related to a sale of goods are generally subject to Ontario's standard limitation periods, which run from when the claim is discovered rather than automatically from the date of sale — as of mid-2026, verify the current limitation rules with a lawyer before assuming how much time remains in any specific situation.
This is a corporate question
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