Conditions and Warranties – Sale of Goods Act, 1930

Introduction

In the context of the Sale of Goods Act, 1930, conditions and warranties are fundamental to understanding the rights and liabilities of buyers and sellers. These are the stipulations incorporated into a contract of sale, and their violation has different legal implications.

Meaning

• Condition: A stipulation essential to the main purpose of the contract. If breached, the aggrieved party can repudiate the contract and claim damages.
• Warranty: A stipulation collateral to the main purpose of the contract. If breached, the aggrieved party can claim damages only, not repudiate the contract.

Key Differences Between Condition and Warranty

Express and Implied Conditions & Warranties

Express

• Clearly stated in the contract by the parties.

Implied (under the Sale of Goods Act, 1930)

Implied Conditions:

• Condition as to Title (Section 14)
• Condition as to Description (Section 15)
• Condition as to Quality or Fitness (Section 16)
• Condition as to Merchantable Quality
• Condition as to Wholesomeness
• Condition in Sale by Sample (Section 17)
• Condition in Sale by Sample as well as Description (Section 15)

Implied Warranties:

• Warranty as to Quiet Possession
• Warranty Free from Encumbrances
• Warranty as to Disclosure of Dangerous Nature
• Customary Warranties (arising out of usage of trade)

Doctrine of Caveat Emptor (Let the Buyer Beware)

Traditionally, the buyer was expected to examine goods before buying. However, Sections 16(1) & 16(2) of the Sale of Goods Act provide exceptions, especially for:

• Goods sold by description and reliance on the seller’s skill/judgment.
• Sale under a trade name.

Change in Condition to Warranty

Under Section 13, a condition may be treated as a warranty in two situations:

1. When the buyer waives the condition.
2. When the buyer has accepted the goods.

Textual Mind Map

Contract of Sale
→ Stipulations
 → Conditions
  → Express
  → Implied (Title, Description, Fitness, Merchantability, Sample)
 → Warranties
  → Express
  → Implied (Quiet Possession, Encumbrances, Customary)
→ Breach
 → Condition: Repudiation + Damages
 → Warranty: Damages Only
→ Conversion
 → Condition to Warranty (Section 13)

Situation-Based Questions

Q1. A buys a car from B believing it to be brand new. It turns out to be used. What can A do?

Ans. This is a breach of condition as to description. A can rescind the contract and claim damages.

Q2. X buys seeds from Y for cultivating wheat. The seeds fail to produce the expected crop. X had relied on Y’s skill. Remedy?

Ans. X can claim damages under condition as to fitness for purpose (Section 16), as he relied on Y’s expertise.

Q3. Z sells a second-hand fridge to A. It works for a day and stops. There was no express warranty. Can A claim anything?

Ans. Possibly not, unless A can prove there was an implied condition of merchantable quality, applicable only in sales by seller in the course of business.

Frequently Asked Questions (FAQs)

Q1. What happens if a condition is breached?
Ans: The buyer may reject the goods and claim damages.

Q2. Can a warranty be treated as a condition?
Ans: No, but a condition may be treated as a warranty under Section 13.

Q3. Are all conditions and warranties written in the contract?
Ans: No, some are implied by law (Sections 14–17 of the Sale of Goods Act, 1930).

Q4. What is the significance of caveat emptor in today’s context?
Ans: Though still relevant, it has exceptions in cases of implied conditions and warranties protecting buyers.

Case Law References

• Baldry v. Marshall (1925): Condition as to fitness for purpose.
• Ashington Piggeries Ltd v. Christopher Hill Ltd (1972): Sale by description.
• Priest v. Last (1903): Implied condition of merchantable quality.
• Nash v. Inman (1908): Capacity to contract and void agreements.
• Wallis v. Pratt (1911): Distinction between condition and warranty