Introduction
Under the Sale of Goods Act, 1930, conditions and warranties are essential legal concepts that define the rights and obligations of buyers and sellers. They distinguish between fundamental terms that go to the root of the contract (conditions) and secondary terms that provide additional assurances (warranties). Understanding these concepts is crucial to resolving disputes, enforcing contracts, and claiming remedies.
Meaning of Condition and Warranty
Condition
A condition is a fundamental stipulation in a contract, the breach of which allows the aggrieved party to repudiate the contract and claim damages.
- Example: A seller guarantees that the goods sold are fit for a particular purpose. If the goods fail this condition, the buyer can reject them.
Warranty
A warranty is a minor term of the contract, the breach of which allows the aggrieved party to claim damages but not repudiate the contract.
- Example: A seller promises that goods are free from minor defects. Breach entitles the buyer to compensation, but the contract remains valid.
Difference Between Condition and Warranty
| Basis | Condition | Warranty |
|---|---|---|
| Importance | Goes to the root of the contract | Incidental or collateral term |
| Breach Consequence | Repudiation of contract + damages | Claim for damages only |
| Example | Fitness of goods for intended purpose | Minor defect or free from encumbrances |
| Remedies | Buyer can reject goods | Buyer must accept goods and claim damages |
Implied Conditions (Sections 14–17)
- Condition as to Title (Section 14):
Seller must have the right to sell the goods.- Case Law: Grant v. Australian Knitting Mills (1936) – Seller liable if goods are unfit for purpose.
- Condition as to Sale by Description (Section 15):
Goods sold by description must correspond with description. - Condition as to Quality or Fitness (Section 16):
If buyer makes known a particular purpose, goods must be fit for that purpose.- Case Law: Ashington Piggeries Ltd v. Christopher Hill Ltd (1972) – Affirmed implied fitness for purpose.
- Condition as to Merchantable Quality (Section 16(2)):
Goods must be of reasonable quality, fit for ordinary purpose.- Applies only when the buyer relies on seller’s skill or judgment.
- Condition as to Sale by Sample (Section 17):
Goods must match sample quality provided.- Case Law: Baldry v. Marshall (1925) – Breach of condition allows rejection of goods.
Implied Warranties (Sections 18–19)
- Warranty of Quiet Possession (Section 18(1)):
Buyer should enjoy undisturbed possession of goods. - Warranty of Free from Encumbrances (Section 18(2)):
Goods must be free from third-party claims or liens. - Warranty of Fitness (Collateral Warranty):
Minor assurances about the quality or performance of goods that do not go to the root of the contract.
Breach of Conditions and Warranties
Breach of Condition
- Buyer can reject the goods and claim damages.
- Seller is liable to compensate for loss caused.
Breach of Warranty
- Buyer cannot reject goods but can claim damages for breach.
- Contract remains valid.
- Case Law: Arcos Ltd v. Ronaasen (1933) – Differentiated between condition and warranty regarding contract enforcement.
Doctrine of Puhishment for Breach
The Sale of Goods Act protects buyers and sellers by specifying remedies:
- Damages: Compensation for loss or deficiency.
- Rejection: Only if condition is breached.
- Specific Performance: Courts may enforce contracts in special circumstances.
Conclusion
Understanding conditions and warranties is critical for ensuring proper enforcement of contracts under the Sale of Goods Act, 1930. Conditions safeguard essential terms, while warranties offer ancillary protection. Awareness of implied conditions, warranties, and relevant case laws enables parties to exercise rights effectively and resolve disputes efficiently.