basis of the bargain test

Basis of the bargain test is used by the courts to ask if any promise or affirmation, any description of the goods, or any sample or model of the goods displayed by a seller “became a basis of the bargain” between a buyer and a seller to create an express warranty on the goods under section 2-313 of the Uniform Commercial Code (UCC).

Though this test is used by the courts to determine if an express warranty exists, it is unclear in the case law how precisely the basis of the bargain is defined, if actual buyer reliance on the promise or description is required, or if the information is something that a reasonable buyer can rely on will suffice to meet the requirement.

The basis of the bargain test requires

  1. An affirmation of fact or promise by the seller;
  2. The natural tendency of which is to induce the buyer to purchase the goods; and
  3. That the buyer purchases the goods in reliance thereon.

In Hocking v. City of Dodgeville, for example, the Supreme Court of Wisconsin did not require “formal words like warranty or guarantee” to create express warranty but clarified that the burden still lies on the buyer to show the seller’s factual representations were the basis of their purchase.

[Last reviewed in September of 2025 by the Wex Definitions Team] 

Keywords

Wex