Conditions and warranties

1. CONDITIONS AND WARRANTIES
Amulya Nigam
Assistant Professor
Jamnalal Bajaj School of Legal Studies
Banasthali Vidyapith

2. CONDITIONS AND WARRANTIES
[SEC 11-17]

3. MEANING OF CONDITION
 A condition is a stipulation –
(a) which is essential to the main purpose of
the contract
(b) the breach of which gives the aggrieved
party a right to terminate the contract.
 It goes to the root of the contract.
 Its non-fulfillment upsets the very basis of the
contract.

4. Sec 12(2) of Sales Of Goods Act, 1930has
defined Condition as:
“A condition is a stipulation essential to the
main purpose of the contract, the breach of
which gives rise to a right to treat the
contract as repudiated”.
CONDITIONS AND WARRANTIES
[SECTIONS 11-17]

5. X asked a car dealer to suggest him a car suitable for touring purposes.
The dealer suggested a 'Buggati Car'. Accordingly, X purchased it but
found it unsuitable for touring purpose. In this case, suitability of car for
touring purpose was a condition of contract. X was, therefore entitled to
reject the car and have refund of the price paid. [Baldry v. Marshall]
EXAMPLE

6. WARRANTY
It is a stipulation collateral to the main
purpose of the contract
It is of secondary importance
If there is a breach of a warranty, the
aggrieved party can only claim damages
and it has no right to treat the contract as
repudiated.

7. Sec 12(3) of Sale Of Goods Act, 1930 has
defined Warranty as :
“A warranty is a stipulation collateral to the main
purpose of the contract, the breach of which
gives rise to only claim for damages but not to
a right to reject the goods and treat the contract
as repudiated”.

8. • Example X asked a car dealer to suggest him a good car and while suggesting the
car, the dealer said that it could run for 20 km per litre of petrol. But the car could
run only 15 kms per litre of petrol. In this case, the statement made by the seller
a warranty. X was therefore not entitled to reject the car but he was entitled to
the damages.

9. HOW TO DETERMINE WHETHER
STIPULATION IS A CONDITION OR
WARRANTY [SECTION 12(4)]
• Whether stipulation is a contract of sale is condition or a warranty depends in each
case on the construction of the contract. Stipulation may be a condition though
called a warranty in the contract.

10. DISTINCTION BETWEEN CONDITION AND
WARRANTY
S.N Basis of Distinction Condition Warranty
1. Essential vs.
Collateral
It is a stipulation which is
essential to the main purpose
of the
contract.
It is a stipulation which is only collateral to
the main purpose of
the contract.
2. Right in case of
breach
The aggrieved party can
terminate the contract.
The aggrieved party can claim
damages but cannot terminate contract.
3. Treatment A breach of condition can be
treated as a breach of war-
flinty. For example. a buyer
may like to retain the goods
and claim only
damages.
A breach of warranty cannot be treated as a
breach of condition.

11. WHEN CONDITION TO BE TREATED AS
WARRANTY [SECTION 13]
• Where the buyer waives a condition; once the buyer waives a condition, he cannot
insist on its fulfillment e.g. accepting defective goods or beyond the stipulated
time amounts to waiving a condition.
• Where the buyer elects to treat breach of the condition as a breach of warranty;
e.g. where he claims damages instead of repudiating the contract.
• Where the contract is not severable and the buyer has accepted the goods or part
thereof, the breach of any condition by the seller can only be treated as a breach
of warranty. It can not be treated as a ground for rejecting the goods unless
otherwise specified in the contract. Thus, where the buyer after purchasing the
goods finds that some condition is not fulfilled. he cannot reject the goods. He has
to retain the goods entitling him to claim damages

12. THANK YOU
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