List the elements of the implied warranty of merchantability and provide an example of a sale of goods that includes this warranty, and how it could be breached.

Article 2 of the UCC code states that in order for goods to be merchantable (or fit for sale) they must:

should correspond to the contract description, e.g. a cereal box should contain cerealmust be of fair average quality, e.g. the cereal must be edible and be of a reasonable quality, like have a decent flavormust be fit to serve the purpose for which an average consumer might purchase them, e.g. you should be able to eat your cereal at breakfast, and it should not require hours or preparationthe quality of all the units included in the package must be similar, although slight variations are permitted, e.g. cornflakes should be of similar size and qualityare properly packaged and labeled, e.g. the package should not be broken and it should include relevant informationfulfill any promise contained in its package or labels, e.g. if the box says it contains cereal with raisins, it must contain cereal with raisins

There are lots of ways in which an implied warranty of merchantability is breached, e.g. if the cereal is spoiled, the box is broken and the contents are falling, cornflakes are all crushed and lost consistency, etc.