CONDITIONS AND WARRANTIES: The Sale of Goods Act 1930 Notes

Contents of Article

Generally, at the time of sale, the seller makes some representation, statements of stipulations for the praise of his goods. Some of representations are in nature of opinion others are in nature of facts. Representation as to fact which becomes a part of contract of sale is called as stipulation.

Stipulation may be condition or warranty depends upon its importance in relation to contract.
Stipulation which is essential to the main purpose of contract is known as condition. Breach of condition gives the aggrieved party right to terminate the contract.

Stipulation which is collateral to the main purpose of the contract is warranty. Breach of warranty gives rise to the aggrieved party right to claim damages but contract cannot be terminated.
The conditions and warranties may be express or implied.
Express conditions and warranties are those, which the parties agree expressly, i.e. orally or in writing.

Implied conditions are those, which are implied by the law in the absence of any agreement to the contrary.

The following are the implied conditions which are contained in the Sales of Goods Act:

Conditions as to title – sec 14(a)
There is an implied condition on the part of the seller that
- In the case of sale, the seller has a right to sell the goods, and
- In the agreement to sell, the seller will have a right to sell the goods at the time of passing of ownership in goods.
  If the title of seller out to be defective, the buyer must return the goods to the true owner and recover the price from the seller.

Conditions as to description – Sec 15
Where the goods are sold by description, there is an implied condition that the goods shall correspond to the description.
Example: A machine was sold. The buyer has not been the machine, but the seller described it as a new one. However, it was found to be a very old one. Held, the machine was not according to the description.

Sale by sample – Sec 17
Where the goods are sold by sample, the following are implied conditions.
- The bulk shall correspond to sample in quality.
- The buyer shall be given a reasonable opportunity to compare the goods with the sample.
- The goods shall be free from any defect, rendering them un – merchantable. It is to be noted that this implied condition applies only in the case of latent defects, i.e. those defects which cannot be discovered by ordinary inspection. In fact, such defects are discovered when the goods are put to use or by examination in laboratories. The seller is not liable for apparent or visible defects which can be discovered by examination.

Sale by description as well as sample – Sec 15
If the sale is by sample as well as description, both conditions shall be satisfied. Goods must correspond with sample as well as description.
Example : A agreed to sell to C some oil described as “Foreign refined oil” and warranted only equal to sample. The goods supplied were equal to sample, but contained a mixture to hemp oil. Held, C could reject the goods.

Conditions as to quality and fitness for buyer’s purpose – Sec 16
- Where the buyer, expressly or impliedly, tells the seller the particular purpose for which he needs the goods and relies on the skill or judgment of the seller, there is an implied condition that the goods shall be reasonably fit for such purpose.
- When the article can be used only for one particular purpose, the buyer need not inform the seller the purpose for which the goods are required.
  Example: A purchased a hot water bottle from a chemist. While the bottle was being used by A’s wife, it burst and injured A’s wife. Held, the seller was liable for damages as the bottle was not fit for the purpose for which it was meant – Priest vs Last.

The condition as to quality or fitness’ well not apply, if the buyer is suffering from an abnormality, which renders the goods unsuitable for a particular purpose and the buyer does not inform the seller about that abnormally.
Example: A purchased a coat. He had abnormally sensitive skin, By wearing the coat, he got skin complaint. Held, there was no breach of condition, as he had not disclosed the abnormally of his skin.

Where the goods can be used for a number of purposes, the buyer should inform the particular purpose for which such goods were required. If the does not disclose, there is no such conditions of quality or fitness.

Conditions as to merchantability
- Where goods are bought by description from a seller, who deals in goods of that description, there is an implied conditions that the goods shall be of merchantable quality.
- ‘Merchantability’ means that there is no defect in the goods, which renders them unfit for sale. Thus, a watch that will not keep time and a pen that will not write cannot be regarded as merchantable.
  Example: A radio set was sold to a layman. The set was defective. It did not work in spite of repairs, Held, the buyer could return the set and claim refund.

Condition as to wholesomeness
- In the case of eatable and food – stuff, there is an implied condition that the goods shall be wholesomeness, i.e., free from any defect which renders them unfit for human consumption.
- Example: A Purchased milk from B, a milk dealer. The milk contained typhoid germs. A’s wife on taking the milk got infected and died. Held, A was entitled to get damages – Frost vs Aylesbury Dairy Co. Ltd.

The following are the implied warranties which are contained in the Sales of Goods Act:

Warranty as to quiet possession – Sec 14
In the absence to any contract showing contrary intention, there is an implied warranty that the buyer shall have and enjoy quiet possession of the goods. If the buyer is disturbed in the enjoyment of the goods, he can claim damages from the seller.

Warranty against encumbrances – Sec 14
Unless the circumstances of the case are such as to show a contrary intension, there is an implied warranty that the goods shall be free from any charge or encumbrance in favour of any party not declared to the buyer before or at the time contract is made. However, there will not be any such warranty if charge is declared to buyer at the time of sale.
Warranty as to quality and fitness by usage of Trade – Sec 16
An implied warranty as to quality or fitness for a particular purpose may be annexed by the usage of trade.

Warranty to disclose the dangerous nature of goods
In case of sale of dangerous goods, the seller is under an obligations to warn the buyer about the probable danger. Failure to do so will make the seller liable to pay damages.
Example : A sold a tin of disinfectant to B, knowing that it was likely to be dangerous to the tin, whereupon disinfectant powder went into her eyes, causing her injury. Held, A was liable in damages to B, as he failed to warn B of the probable danger

Difference between Condition and Warranty

Matter	Condition	Warranty
Stipulation If breach? Treatment	Essential to main purpose of contract Buyer has right to cancel contract Breach of condition may be treated as breach of warranty	Collateral (subsidiary) to main purpose of contract. Buyer has no right to cancel the contract . Can claim damages Breach of warranty can’t be treated as breach of condition