Warranties

Every contract of sale of goods has certain stipulations, terms and conditions regarding the nature, quality, quantity of the goods, etc. There are also many obligations under the contract for sale of goods. However, the importance of every such term, stipulation and obligation is not equal.

 

MEANING OF CONDITION AND WARRANTY

Under the Sale of Goods Act, the stipulations in a contract of sale with reference to goods are classified based on their importance as condition or a warranty.

If the stipulation agreed to between the parties is essential to the main purpose of the contract and is of such a nature that if the stipulation is breached (i.e. violated/not complied) then a party to the agreement would have a right to treat the contract as repudiated (cancelled) then such a stipulation is known as a condition.

On the other hand, a warranty is a stipulation collateral to the main purpose of the contract. The breach of such a stipulation gives rise to a claim for damages only. The parties cannot reject the goods and treat the contract as repudiated.

Whether a stipulation in a contract of sale is a condition or a warranty depends on the type of contract. Even if the parties have agreed that a stipulation is a warranty, in fact, it may be a condition if it is the basis of the contract.

If a contract of sale is subject to any condition to be fulfilled by the seller and the seller does not fulfil it, the buyer, can waive the fulfilment of the condition or he can treat it as non-fulfilment of a warranty. This is left to the buyer. However, if the buyer has accepted the goods, then such a choice is not available to the buyer and the buyer has to treat the non-fulfilment of condition by the seller as a breach of warranty only, unless there is express or implied term of contract.

IMPLIED CONDITIONS AND WARRANTIES

In a contract of sale of goods conditions and warranties may be either expressed or implied. Expressed conditions and warranties are those, which are expressly stated in the contract. Implied conditions and warranties are those, which the law implies into every contract of sale of goods. However, such implied conditions and warranties can be excluded by the parties to the contract if they agree expressly on these issues.

A. Title of the seller

There is an implied condition on the part of the seller that,

•              he has a right to sell the goods (in the case of a sale), or

he will have a right to sell the goods at the time when the ownership is to pass to the buyer (in the case of an agreement to sell).

 

Illustration

A buys a second-hand car from B and pays him. Police takes away the car, as it was a stolen one. A can recover the price paid, from B, as he has violated the implied condition above.

B.            Sale of goods by description

In the sale of goods by description, there is an implied condition that the goods shall correspond with the description.

Illustration

A sells certain curtains to B by describing them to be of seventeenth century. Later on B discovers, that the curtains are not of the seventeenth century. A can reject the goods and claim back the price.

C.            Sale by sample

In case of a sale by sample there is an implied condition that the

(a)           bulk shall correspond with the sample in quality;

(b)           buyer shall have an opportunity to compare the bulk with the sample;

(c)           goods shall be free from any defect, rendering them unmerchantable, which would not be apparent on reasonable examination of the sample.

 

Illustration

A wants to buy rubber material of a certain length and width. B shows a sample to A. A approves the sample but B delivers the same material with a variation in the length of the rubber. A can reject the goods as the goods did not correspond with the sample in quality.

D.            Sale is by sample as well as by description

If the sale is by sample as well as by description, the goods must correspond not only to the sample but also to the description given.

Illustration

A sells to B, 'foreign rape-seed refined oil'. He even shows a sample to B. Afterwards the oil according to the sample is delivered to B. When the oil is delivered to B, he discovers that there is some 'hemp oil' also mixed in it. B can reject the goods because he was delivered as per the sample but the sample and oil itself were not 'foreign rape-seed refined oil' as described by A.

£. Quiet possession

There is an implied warranty that the buyer shall have and enjoy quiet possession of the goods. F. Goods are free from any charge or encumbrance

There is an implied warranty that the goods shall be free from any charge or encumbrance in favour of any third party not declared or known to the buyer before or at the time when the contract is made. This means that the buyer can assume that the goods that are being sold to him would be his absolute property and no one would claim any right over the goods in future once he pays the price and purchases then from the seller.

G Quality or fitness of goods for any particular purpose

There is no implied warranty or condition as to the quality or fitness of goods for any particular purpose except in the following case:

If the buyer discloses to the seller the purpose for which he wants the goods and he relies on the seller's skill/judgement and if the goods are in the course of the seller's business to supply then in such case, there is an implied condition that the goods shall be reasonably fit for such purpose.

Illustration

A buys a hot water bottle from B (a retail chemist). A asked B whether it would hold hot water. B says it is meant to hold hot water only. As wife is injured as the hot water bottle bursts. B was held liable for breach of implied condition as to the quality or fitness of the hot water bottle.

If goods are bought by description from a seller who deals in goods of that description, there is an implied condition that the goods shall be of merchantable quality. However, if the buyer has examined the goods, there is no implied condition as regards defects which can be revealed by examination.

 

•              The usage of trade may give an implied warranty or condition as to quality or fitness of goods forany particular purpose.

 

It is to be noted that an express warranty or condition given by any party is always in addition to the implied warranties or conditions as explained above.

H. Caveat Emptor (Buyer beware)

 

Caveat means a warning, a caution. According to the doctrine of caveat emptor, the person who buys goods must keep his eyes open, his mind active and be cautious while buying the goods. In other words, the buyer must examine the goods thoroughly. Later on, if the goods do not serve his purpose or he depends upon his own judgement and he makes a bad choice, he cannot blame the seller for selling him such goods. The Sale of Goods Act also enshrines doctrine by stating that 'There is - ( implied warranty or condition as to the quality or fitness of goods for any particular purpose' except in cases specifically explained above.


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