Conditions and Warranties in Sale of Goods

Introduction

In a contract of sale, certain terms define the rights and obligations of the buyer and seller. These terms are classified as conditions and warranties. Understanding this distinction is important because it determines the remedies available when a contract is breached.

Meaning / Definition

A stipulation (term) in a contract of sale may be either a condition or a warranty.

Condition
A condition is a term that is essential to the main purpose of the contract. If it is breached, the aggrieved party can reject the goods and treat the contract as ended (repudiated).
(Section 12(2), Sale of Goods Act, 1930)

Warranty
A warranty is a term that is secondary (not essential) to the main purpose of the contract. If it is breached, the aggrieved party can only claim damages (money compensation), but cannot reject the goods.
(Section 12(3), Sale of Goods Act, 1930)

The classification depends on the importance of the term, not the label used by the parties.

Modes or Types

Conditions

Express Conditions

These are clearly stated in the contract by the parties.

Example: Delivery must be made before a specific date.

Implied Conditions

These are not written but are assumed by law or nature of the contract.

Examples include:

• Goods must match description
• Goods must be of acceptable quality (fit for use)

Warranties

Express Warranties

These are specifically agreed and written in the contract.

Example: A seller promises free repair for one year.

Implied Warranties

• Warranty of quiet possession (peaceful use)
  Buyer should not be disturbed in using the goods.

• Warranty of freedom from charges (no hidden claims)
  Goods should not have any hidden legal claims by third parties.

• Warranty to disclose dangerous nature
  Seller must inform if goods are dangerous.

Distinction / Comparison

Nature

• Condition: Essential term
• Warranty: Secondary term

Effect of Breach

• Condition: Contract can be terminated + damages
• Warranty: Only damages can be claimed

Right to Reject Goods

• Condition: Yes
• Warranty: No

Conversion

• Condition can be treated as warranty by the buyer
• Warranty cannot become a condition

Importance

• Condition: Fundamental to contract
• Warranty: Additional support term

Practical Example

A buys a red saree for a wedding on a specific date.

• If the saree is not red → breach of condition → A can reject it
• If the saree has minor stitching defect → breach of warranty → A can claim damages

Another example:
A buys a horse claiming it runs at 50 km/h. If it runs only 30 km/h → breach of condition.

Summary

• Conditions are essential terms; warranties are secondary terms
• Breach of condition allows rejection of goods and damages
• Breach of warranty allows only damages
• Classification depends on importance, not wording
• Conditions can be treated as warranties, but not the reverse
• Law protects buyers through implied conditions and warranties