Condition & Warranty Under Sales Of Goods,1930

According to section 12(1) of the sales of goods act, 1930. ‘A stipulation in a contract of sale with reference to goods which are the subject thereof may be a condition (or) a warranty. According to section 12(2), a ‘Condition’ is a stipulation essential to the main purpose of the contract, the breach of which gives raise to a right to treat the contract as repudiated. According to section 12(3), a ‘Warranty’ is a stipulation collateral to the main purpose of the contract, the breach of which gives raise to a claim for damages but not to the right to reject the goods and treat the contract as repudiated.

The Act prescribes some of the implied conditions in a contract. Buyer can repudiate the contract for breach of any of these conditions:-.

1. Condition as to title: Section 14(a) In a contract of sale, unless the circumstances of the contract are such as to show a different intention, there is an implied condition on the part of the seller, that, a) In case of a sale, he has the right to sell the goods and b) In case of an agreement to sell; he will have a right to sell the goods at the time when the property is to pass. Thus, if the seller sells stolen goods, the buyer can repudiate the contract and claim damages also, as the seller had no right to sell the goods.

2. Sale by description: (section 15) where there is a contract for the sale of goods by description, there is an implied condition that the goods shall correspond with the description. ‘Sale of goods by description’ includes the following:

a) Where the buyer has not seen the goods and relies on their description given by the seller.

b) Where the buyer has seen the goods but he relies not on what he has seen but what was stated to him and deviation of the goods from the description is not apparent.

c) Packing of goods may sometimes be a part of the description.

3. Condition as to quantity (or) fitness: (section 16(1)) where the buyer, expressly (or) by implication, makes known to the seller the particular purpose for which he requires the goods, so as to show that the buyer relies on the seller’s skill (or) judgment, and the goods are of a description which is in the course of the seller’s business to supply, there is an implied condition that the goods shall be a reasonable fit for the purpose. This will not apply where specific goods are sold under their patient (or) trademark. Thus, the four conditions must be fulfilled:

a) The purpose must have been disclosed (expressed or implied) by the buyer.

b) The buyer must have relied on the seller’s skill (or) judgment.

c) The seller’s business must be to sell those goods.

d) The goods should not have been sold under a patient (or) trademark.

4. Conditions as to merchantability: (Section 16(2)) where goods are bought by description from a seller who deals in goods of that description (whether he is the manufacturer or producer or not), there is an implied condition that the goods shall be of merchantable quantity; provided that, if the buyer has examined the goods, there shall be no implied condition as regards defects which such examination ought to have revealed.

5. Condition implied by custom: (section 16(3)) An implied condition as to quantity (or) fitness for a particular purpose may be annexed by the usage of trade. The purpose for which the goods are required may be ascertained from the acts and conducts of the parties and from the nature of the description of the article purchased.

6. Sale by sample: (Section 17) In a sale by sample the following are the implied conditions

a) The bulk shall correspond with the sample in quantity.

b) That the buyer shall have a reasonable opportunity of comparing the bulk with the sample.

c) That the goods shall be free from any defects rendering them un-merchantable, which would not be apparent on a reasonable examination of the sample.

7. Condition as to wholesomeness: In the case of eatables and provisions, in addition to the implied condition as to merchantability there is another implied condition that the goods shall be wholesome.

The implied warranties in a contract of sale are as follows:-

1. Warranty of quiet possession: (section 14(b)) In a contract of sale, unless the contrary intention appears, it is implied that the buyer shall have and enjoy quiet possession of the goods. If the buyer is in any way disturbed in the enjoyment of the goods in consequence of the seller’s defective title to sell, then the buyer is entitled to sue the select for damages.

2. Warranty of freedom from encumbrances: (section 14 (C)) means that the goods are free from any charge (or) encumbrances in favor of any third party, not declared to (or) known to the buyer. in such a case he shall have a right to claim damages for breach of this warranty.

3. Warranty as to quantity (or) fitness by the usage of trade:(Section 16(4)) An implied warranty as to quantity (or) fitness for a particular purpose may be annexed by the usage of trade.

4. Warranty as to disclose dangerous nature of goods: Where a person sells goods knowing that the goods are inherently dangerous (or) they are likely to be dangerous to the buyer and that the buyer is ignorant of the danger. In such a case the seller warns the buyer otherwise he would be held liable.