Conditions and Warranties in Sale of Goods
Introduction
Conditions and warranties are important terms in a contract of sale. They decide the rights and remedies available when either party breaks the contract. Understanding this helps buyers and sellers protect their interests and take proper legal action when needed.
Meaning / Definition
A contract of sale may contain terms (called stipulations). These stipulations may be either conditions or warranties.
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Condition (Section 12(2)): A condition is a term that is essential to the main purpose of the contract. If it is broken, the aggrieved party (affected party) can cancel the contract and claim damages.
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Warranty (Section 12(3)): A warranty is a term that is secondary to the main purpose of the contract. If it is broken, the aggrieved party can only claim damages but cannot cancel the contract.
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Whether a term is a condition or warranty depends on its importance, not the name used in the contract.
Modes or Types
Conditions
Express Conditions
These are conditions clearly stated by the parties in the contract.
Example: Delivery of goods on a specific date for an event.
Implied Conditions
These are conditions assumed by law even if not written in the contract (Sections 14–17).
Examples include:
- Goods must match the description
- Goods must be of good quality (fit for use)
Warranties
Express Warranties
These are warranties clearly agreed upon and written in the contract.
Example: Warranty card for repair or replacement.
Implied Warranties
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Warranty of Quiet Possession (Section 14(2))
Buyer should enjoy possession without disturbance. -
Warranty against Encumbrances (Section 14(3))
Goods should be free from any third-party claim unknown to the buyer. -
Warranty to Disclose Dangerous Nature
Seller must warn if goods are dangerous and buyer is unaware.
Distinction / Comparison
| Basis | Condition | Warranty |
|---|---|---|
| Importance | Essential to contract | Secondary term |
| Legal Effect | Breach allows cancellation + damages | Only damages allowed |
| Right to Reject Goods | Yes | No |
| Remedy | Repudiation (cancel) + damages | Only damages |
| Conversion | Can be treated as warranty | Cannot become condition |
Practical Example
A buyer purchases a red saree for a wedding on a specific date.
- If the saree is not delivered before the wedding → breach of condition (contract can be cancelled).
- If the saree has a minor stitching issue → breach of warranty (only damages can be claimed).
Summary
- Conditions are essential terms; warranties are secondary terms
- Breach of condition allows cancellation and damages
- Breach of warranty allows only damages
- Terms may be express (written) or implied (assumed by law)
- Classification depends on importance, not wording
- Conditions can be treated as warranties, but not vice versa