Conditions and Warranties, Implied Conditions and Implied Warranties

Under the Sale of Goods Act, 1930, the terms of a contract of sale can be classified as either conditions or warranties. These terms are important because they determine the extent of liability of the seller for any defects in the goods sold.

Conditions:

A condition is a term of the contract that is essential to the main purpose of the contract. It is a fundamental term that goes to the root of the contract. If a condition is breached, the aggrieved party can treat the contract as repudiated and can claim damages for breach of contract. The aggrieved party can also refuse to accept the goods or return the goods if they have already been delivered.

Some examples of conditions include:

• Fitness for purpose: Goods sold must be fit for the purpose for which they are intended.
• Satisfactory quality: Goods sold must be of satisfactory quality, taking into account the description, price, and other relevant factors.
• Correspondence with description: Goods sold must correspond with the description given.

Kinds of Conditions

Under the Sale of Goods Act, 1930, the conditions of a contract of sale can be categorized into the following two kinds:

1. Express conditions: These are the conditions that are explicitly agreed upon by the parties and are included in the contract of sale. Express conditions can be oral or written. For example, if the parties agree that the goods must be delivered by a certain date, that becomes an express condition of the contract.
2. Implied conditions: These are the conditions that are not expressly agreed upon by the parties but are deemed to be part of the contract by virtue of the Sale of Goods Act, 1930. Implied conditions can be further classified into the following two types:

• Conditions implied by law: These are the conditions that are deemed to be part of the contract by virtue of the law. For example, Section 16 of the Sale of Goods Act, 1930, provides that in a contract of sale, there is an implied condition that the seller has the right to sell the goods.
• Conditions implied by custom: These are the conditions that are deemed to be part of the contract by virtue of the custom of the trade. For example, in the sale of second-hand goods, there is an implied condition that the goods are reasonably fit for their purpose.

Warranties:

A warranty is a term of the contract that is not essential to the main purpose of the contract. It is a subsidiary term that does not go to the root of the contract. If a warranty is breached, the aggrieved party can claim damages for breach of contract, but cannot treat the contract as repudiated. Some examples of warranties include:

• Quiet possession: The buyer shall have quiet possession of the goods, meaning that the goods are free from any encumbrances or claims by third parties.
• Free from encumbrances: The goods sold are free from any charge or encumbrance in favour of third parties.
• Availability of spares: The seller shall ensure the availability of spares for a certain period.

Types

Under the Sale of Goods Act, 1930, the warranties of a contract of sale can be categorized into the following two kinds:

1. Express warranties: These are the warranties that are explicitly agreed upon by the parties and are included in the contract of sale. Express warranties can be oral or written. For example, if the seller warrants that the goods are of a certain quality, that becomes an express warranty of the contract.
2. Implied warranties: These are the warranties that are not expressly agreed upon by the parties but are deemed to be part of the contract by virtue of the Sale of Goods Act, 1930. Implied warranties can be further classified into the following three types:

• Warranty of title: This is an implied warranty that the seller has the right to sell the goods and that the buyer will not be disturbed in his or her possession of the goods by anyone claiming a better title.
• Warranty of quiet possession: This is an implied warranty that the buyer will be able to enjoy quiet possession of the goods without any disturbance from the seller or anyone else claiming a better title.
• Warranty of fitness for purpose: This is an implied warranty that the goods are reasonably fit for the purpose for which they are intended.

Differences

Implied Conditions and Implied Warranties

Implied Conditions

Implied conditions are terms that are not expressly stated in a contract but are assumed to be present by law or custom. In the context of the Sale of Goods Act, 1930 in India, there are certain conditions that are implied in every contract of sale, unless the parties have agreed otherwise.

The following are the implied conditions under the Sale of Goods Act, 1930:

• Condition of title: The seller must have the right to sell the goods, and the buyer must receive good title to the goods.
• Condition of description: If the goods are sold by description, the goods must correspond to the description.
• Condition of quality or fitness: The goods sold must be of merchantable quality and reasonably fit for the purpose for which they are intended.
• Condition of sample: If goods are sold by sample, the bulk must correspond to the sample in quality and condition.
• Condition of sale by sample as well as description: If the goods are sold by sample as well as by description, the goods must correspond to both the sample and the description.
• Condition of fitness for a particular purpose: If the buyer expressly or impliedly makes known to the seller the particular purpose for which he requires the goods, there is an implied condition that the goods shall be reasonably fit for that purpose.

If any of these conditions is breached, the buyer has the right to reject the goods and treat the contract as repudiated. However, if the breach is not fundamental, the buyer may still have a claim for damages. It is important to note that implied conditions cannot be excluded or modified by the parties to the contract.

Implied Warranties

Implied warranties are promises that are not expressly stated in a contract but are presumed to exist because of the nature of the transaction, the conduct of the parties, or the law. In the context of the Sale of Goods Act, 1930 in India, there are certain warranties that are implied in every contract of sale, unless the parties have agreed otherwise.

The following are the implied warranties under the Sale of Goods Act, 1930:

• Warranty of title: The seller warrants that he has the right to sell the goods and that the buyer will receive good title to the goods.
• Warranty of quiet possession: The seller warrants that the buyer will have undisturbed possession of the goods, free from any third-party claims.
• Warranty of freedom from encumbrances: The seller warrants that the goods are free from any charge or encumbrance that was not disclosed or known to the buyer at the time of the sale.
• Warranty of quality or fitness: The goods sold must be of merchantable quality and reasonably fit for the purpose for which they are intended.
• Warranty of sale by sample: If the goods are sold by sample, the seller warrants that the bulk will correspond to the sample in quality and condition.
• Warranty of sale by description: If the goods are sold by description, the seller warrants that the goods will correspond to the description.

If any of these warranties is breached, the buyer has the right to claim damages, but not to reject the goods. The buyer can only reject the goods if an implied condition is breached. Unlike implied conditions, implied warranties can be excluded or modified by the parties to the contract, as long as the exclusion or modification is fair and reasonable in the circumstances.

It is important to note that the implied warranties under the Sale of Goods Act, 1930 are not the only warranties that can be implied in a contract of sale. Other warranties can be implied depending on the nature of the transaction, the conduct of the parties, or the terms of the contract.

Differences