(1) In an agreement there shall be implied—
(a) a condition that the seller or owner will have the right to sell the goods at the time when the goods are to pass;
(b) a warranty that the goods will be free from any charge or encumbrance in favour of any third party at the time when the property is to pass;
(c) a warranty that the consumer shall enjoy quiet possession of the goods.
(2) In an agreement there shall be an implied condition that at the time when the goods are delivered to the consumer they shall be, or where they were so delivered before the agreement was entered into they were, at the time of delivery, of merchantable quality; but such a term shall not be implied—
(a) as regards defects which are specified in the agreement if the seller or owner proves that the defects were specifically drawn to the consumer's attention and accepted by him or her in writing before the agreement was entered into;
(b) if the consumer examined the goods or a sample of them before the agreement was entered into as regards defects which the examination ought to have revealed;
(c) if the goods are second hand goods and the agreement contains a statement—
(i) signed by the consumer in the following terms –
“I understand that the goods to which this agreement relates are second-hand goods and that [insert name of seller or owner] does not promise that they are fit for use or for any particular purpose”, and
(ii) that all conditions and warranties as to quality are expressly negated.
(3) For the purposes of this section goods of any kind are of merchantable quality if they are as fit for the purpose for which goods of that kind are commonly bought as it is reasonable to expect having regard to their price, any description applied to the goods and all the other circumstances.