CONDITIONS AND WARRANTIES-----WHEN CONDITIONS MAY BE TREATED AS WARRANTIES:

INTRODUCTION:

A contract of sale of goods contains various terms, conditions or stipulations with reference to goods which are the subject matter of sale, e.g., relating to the nature, quality of the goods, price, mode of payment, delivery of goods and its time and place. But every such term is not likely to be of equal importance. Some of these are essential to the contract and their non-fulfillment may seem to frustrate the very basis of the contract as a whole. Such terms are known as conditions of the contract of sale.

On the other hand, there may be certain terms which are not so vital to the contract that their breach may seem to be a breach of the contract as such. Such terms are known as warranties of the contract of sale. Thus, conditions are more important than warranties in the contract of sale of goods.

 

RELEVANT LAW AND PROVISIONS:

Sections 11–17 of the Sale of Goods Act

 

WHAT ARE CONDITIONS AND WARRANTIES:

• Section 12(2) defines Condition as a stipulation essential to the main purpose of the contract, the breach of which gives the aggrieved party a right to repudiate the contract itself. In addition, action for damages for loss suffered, if any, due to breach of condition can also be made.

• Section 12(3) defines Warranty as a stipulation collateral to the main purpose of the contract, the breach of which gives the aggrieved party a right to sue for damages and not to avoid the contract itself.

 

DIFFERENCE BETWEEN CONDITION AND WARRANTY:

Aspect	Condition	Warranty
1) Relation to Main Purpose	Condition is necessary to the main purpose of the contract.	Warranty is subsidiary to the main purpose of the contract.
2) Rights of the Aggrieved Party	Breach of condition gives the aggrieved party a right to repudiate the contract and get damages.	Breach of warranty entitles the aggrieved party to claim damages only.
3) Treating Condition as Warranty	A breach of condition may, under certain circumstances, be treated as a breach of warranty.	A warranty cannot become a condition.
4) Legal Effects of Breach	Breach of condition will affect the legality of the contract.	Breach of warranty will not affect the legality of the contract.
5) Discharge on Breach	In case of breach of condition, the aggrieved party is free to discharge his promise.	In case of breach of warranty, the aggrieved party is not free to discharge his promise.

 

WHEN CONDITIONS MAY BE TREATED AS WARRANTIES:

A buyer can treat the breach of a condition as a breach of warranty. This option has been given to him under Section 13(1) of the Sale of Goods Act which lays down that:

"Where a contract of sale is subject to any condition to be fulfilled by the seller, the buyer may waive the condition or elect to treat the breach of the condition as a breach of warranty and not as a ground for rejecting the goods."

In the following cases, a contract is not avoided even on account of a breach of condition:

 

• a) Where the buyer altogether waives the performance of the condition. A party may, for his own benefit, waive a stipulation.

• b) Where the buyer elects to treat the breach of condition as one of a warranty. That is to say, he may only claim damages instead of repudiating the contract.

• c) Where the contract is non-severable and the buyer has accepted either the whole goods or any part thereof.

• d) Where the fulfillment of any condition or warranty is excused by law by reason of impossibility or otherwise.

 

IMPLIED AND EXPRESS CONDITIONS AND WARRANTIES:

Conditions may be express or implied. They are express when, at the will of the parties, they are inserted in the contract. They are said to be implied when the law presumes their existence in the contract, even though it has not been put into it in express words.
According to Section 62, implied conditions and warranties may be varied by express agreement or by the course of dealing between the parties, or by usage of trade.

 

IMPLIED CONDITIONS:

In a contract of sale of goods, the following conditions are implied unless the circumstances of the contract show a different intention:

a) Condition as to title (Section 14(a))

• An implied condition on the part of the seller that, in case of the sale, he has a right to sell the goods.

• That, in the case of an agreement to sell, he will have a right to sell the goods at the time when the property is to pass.

b) Sale by description (Section 15)
In a contract of sale by description, there is an implied condition that the goods shall correspond with the description. The description may be in terms of quality or characteristics of goods.

c) Sale by sample (Section 17)
There is an implied condition that the bulk of goods shall correspond with the sample in quality, and the buyer shall have a reasonable opportunity of comparing the bulk with the sample.

d) Sale by sample as well as by description (Section 15)
The bulk of goods shall correspond both with the sample and with the description.

e) Condition as to quality and fitness (Section 16)
This condition may be implied if the buyer had made known to the seller the purpose of his purchase and relied upon the skill and judgment of the seller to select suitable goods, and the seller has ordinarily been dealing in those goods.

f) Condition as to wholesomeness
In the case of eatables and provisions, in addition to the implied condition as to merchantability, there is another implied condition that the goods shall be wholesome.

 

IMPLIED WARRANTIES:

a) The buyer shall have and enjoy quiet possession of the goods. (Section 14(b))
b) The goods shall be free from any charge or encumbrance. (Section 14(c))
c) Warranty of disclosing the dangerous nature of goods to an ignorant buyer.

 

CONCLUSION:

In a contract of sale of goods, distinguishing between conditions and warranties is vital as it determines the rights and remedies available to the parties in case of a breach. Conditions go to the root of the contract, and their violation can allow the buyer to repudiate the contract. Warranties, being of a secondary nature, allow only for a claim of damages. The Sale of Goods Act provides flexibility by allowing a buyer to treat a breach of condition as a breach of warranty in specific circumstances. It also ensures fair dealing through the concept of implied terms, safeguarding the buyer’s interest even when not expressly mentioned in the contract. Understanding and applying these concepts correctly leads to clarity and security in commercial transactions.