All of us who have bought electronic items or similar devices, ask about the warranty periods. In some cases, you may have seen that even the warranty is sold separately as a commodity. But does the law say about it? Here in this section on the concepts of condition and warranty, we will see the manner in which we can define these terms and also the manner in which they derive their legality in the light of The Sale Of Goods Act, 1930.
Warranty And Conditions
In a contract of sale, parties may make certain statements about the stipulation or the course of trade. These stipulations in the contract of sale are made with reference to the subject matter of the sale. These stipulations may either be a condition or in the form of a warranty. The provisions of the conditions and warranty are provided in the sections 11 to 17 of the Act. The stipulations are the essence of the contract of sale and a breach of these stipulations provides a remedy to the grieved party.
Stipulations As To Time – Sec 11
To understand the concept of warranty and conditions, we need to learn about the stipulation as to time. The stipulation as to time may be with regards to the delivery of goods or it may be with regards to the payment of the price. However, it may be noted that stipulations as to the time of delivery of the goods are usually the essence of the contract. In Section 11 of the Act, the topic of the stipulation as to time has been discussed. The Sec 11 states the follows:
Stipulations as to time: Unless a different intention can be ascertained from the contract, stipulations as to the time of payment are not considered to be of the essence of a contract of sale. Whether any other stipulation as to time is of the essence of the contract or not will ultimately depend on the terms of the contract.
This means that whether the stipulations as to the time of payment of the price is of the essence of the contract or not depends on the terms of the contract. Unless the terms of the contract specify something different than this.
A condition is a stipulation essential to the main purpose of the contract, the breach of which gives the right to repudiate the contract and to claim damages. (Sec 12 (2)). We can understand this with the help of the following example:
Say ‘X’ wants to purchase a car from ‘Y’, which can have a mileage of 20 km/lt. ‘Y’ pointing at a particular vehicle says “This car will suit you.” Later ‘X’ buys the car but finds out later on that this car only has a top mileage of 15 km/ liter. This amounts to a breach of condition because the seller made the stipulation which forms the essence of the contract. In this case, the mileage was a stipulation that was essential to the main purpose of the contract and hence its breach is a breach of condition.
A warranty is a stipulation collateral to the main purpose of the said contract. The breach of warranty which gives rise to a claim for damages. However, it does give a right to reject the goods or treat the contract as repudiated. (Sec 12(3)). Let us understand this with the help of an example below.
A man buys a particular car, which is warranted to be quite to drive and very comfortable. It turns out that after some days the car starts to make a very unpleasant noise everytime it is operated. Also sitting inside it is also not very comfortable. Thus the buyer’s only remedy is to claim damages. This is not a breach of condition but rather a breach of warranty, because the stipulation made by the seller was only a collateral one.
Identification of a Stipulation as a Condition or Warranty
Whether a stipulation is a condition or a warranty is a very important aspect to have the knowledge about. A stipulation in a contract of sale is either a condition or is a warranty depending in either case on the construction of the contract. A stipulation may be a condition, though called a warranty in the contract.
|Nature||A warranty is only a collateral to the main purpose of the contract.||It is essential to the main purpose of the contract.|
|Exemption from performance in case of a breach of the stipulation.||In this case, the aggrieved party can’t rescind the contract but can claim damages only.||The aggrieved party can repudiate the contract and is exempted from performance and can also claim damages.|
|Treatment||Breach of warranty can’t be treated as a breach of condition.||A breach of contract may be treated as a breach of warranty.|
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