A warranty is a stipulation collateral to the main purpose of the contract, the breach of which gives rise to a claim for damages but not to a right to reject the goods and treat the contact as repudiated.

1. Sales of goods act – Warranty
Legal Environment of Business

2. Prepared By
Manu Melwin Joy
Assistant Professor
Ilahia School of Management Studies
Kerala, India.
Phone – 9744551114
Mail – manu_melwinjoy@yahoo.com
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3. Definition
• A warranty is a
stipulation collateral to
the main purpose of the
contract, the breach of
which gives rise to a
claim for damages but
not to a right to reject
the goods and treat the
contact as repudiated.

4. Example
• A visits a dealer to buy a car. The dealer
suggests that he has a car which runs 20 km/ 1
litre. A makes an agreement to buy that car.
Later, on it turns out that the care run 10 km/ 1
litre. It amounts to breach of warranty because
the stipulation made by the dealer is supportive
one. Thus A can only claim for compensation,
He is not entitled to avoid contract.

5. Essentials of a warranty
• It is collateral to the main
purpose of the contract.
• The breach of warranty
causes damage to the
aggrieved party and does
not defeat the main
purpose of the contract.
• The aggrieved party can
only claim the damages for
the breach of warranty but
cannot repudiate the
contract.

6. Distinction between a condition and warranty
No Difference Condition Warranty
1 Nature It is fundamental in nature
and essential for main
purpose of contract.
It is supportive and
collateral for the contract.
2 Breach Due to breach of condition,
the contract may be
avoided.
It’s breach may give rise to a
right to claim for
compensation.
3 Treatment Breach of condition can be
treated as a breach of
warranty.
Breach of warranty cannot
be considered as a breach
of condition

7. Implied warranty
• Warranty for quiet
possession – The buyer has
obtained the possession of
goods and if the buyer is in
any way disturbed in the
enjoyment of goods, the
buyer has a right to sue the
seller for damages caused.

8. Example
• In Mason Vs Burningham, a
lady purchased a second hand
type writer from A. She used it
for some months and also
spent some money on its
repair. But subsequently, it was
found that it belonged to B.
Hence he was forced to
surrender it to the true owner
B. It was held that she was
entitled not only to get back
the price but also to recover
the cost of repair from A.

9. Implied warranty
• Implied warranty against
encumbrance – The goods are
not subject to any charge or
encumbrance in favor of third
parties which is not disclosed
or known the buyer before or
at any time when the contract
is made.

10. Example
• A person had pledged his
goods. Subsequently, he
took them from the
pledge under some
pretext and sells them.
While the buyer is in
possession, it is disturbed
the pledges. Since the
warranty is broken, the
buyer may recover
damages.

11. Implied warranty
• Implied warranty as to
usage of trade – An
implied warranty as to
quality or fitness for a
particular purpose may be
fixed by the usage of
trade.

12. Example
• When the goods are
dangerous and the sellers
is aware that the buyer is
ignorant of the dangerous
nature of the goods, he
should warn the buyer
about the probable
danger.