Conditions And warranties

Condition
[sec12(2)]

A condition is a term (oral or written) which goes directly 'to the root of the contract', or is so essential to its very nature that if it is broken the innocent party can treat the contract as discharged. That party will not therefore be bound to do anything further under that contract.

Warranty
[sec12(3)]

A warranty is a term of the contract which is collateral or subsidiary to the main purpose of the contract. It is therefore not so vital as to affect a discharge of the contract. A breach of warranty only entitles the innocent party to an action for damages; he cannot treat the contract as discharged.

DISTINCTION BETWEEN 'CONDITION' AND 'WARRANTY'

Condition

Warranty

1. A condition is a stipulation (in a 1. A warranty is a contract), which is essential to stipulation, which is only the main purpose of the collateral or subsidiary contract. to the main purpose of the contract. 2. A breach of condition gives the aggrieved party a right to sue 2. A breach of warranty for damages as well as the right gives only the right to to repudiate the contract. sue for damages. The 3. A breach of condition may be contract cannot be repudiated. treated as a breach of warranty in certain circumstances. 3. A breach of warranty cannot be treated as a breach of condition.

ExampleA man buys a particular horse, which is warranted quiet to ride and drive. If the horse turns out to be vicious, the buyer's only remedy is to claim damages. But if instead of buying a particular horse, a man asks a dealer to supply him with a quiet horse and the horse turns out to be vicious, the stipulation is a condition and the buyer can reject the horse, or keep the horse and claim damages.

Conditions v. Warranties
Two cases involving opera singers show the difference between conditions and warranties .

In Poussard v Spiers and Pond, Mrs. Poussard was an opera singer. She agreed to sing in an opera starting on 28 November. However, she became ill and was unable to sing until 4 December. The opera company had to hire another singer so that the opera could start on 28 November. They could only get another singer if they hired her for all the performances of the opera. They did this and refused the services of Mrs Poussard once she was better Mrs. Poussard raised a court action to try to make the company pay her However, the court said that Mrs. Poussard breached a condition of the contract when she was unable to perform on 28 November This was a basic term of the contract

The position was different in Bettini v Gye

Bettini was an opera singer He agreed to sing in London in a number of theatres beginning on 30 March He also agree that he would arrive in London 6 days before the first performance in order to practice. Bettini became ill and did not arrive in London until 3 days before the first performance The opera company refused to allow him to sing They said he had breached the contract However, the court said that the part of the agreement about practicing was a warranty not a term . That meant it was not a basic part of the contract. It was subsidiary part.

Types of conditions and warranties

1) Express which are expressly provided in the contract. 2) Implied- which the law implies into the contract unless the parties stipulate to the contrary.

Implied conditions
1. 2. 3. 4. 5.

Condition as to title
sell.

[sec.14(a)]

- seller has the right to

Sale by description
the description.

(sec.15)- goods shall correspond with

Condition as to quality or fitness [sec16(1)] Condition as to merchantability [sec.16(2)] Condition implied by custom- fitness for a particular
purpose may be annexed by the usage of trade [sec.16(3)]

6.
7.

Sale by sample (sec.17) Condition as to wholesomeness

Implied warranties
1. Warranty of quiet possession [sec.14(b)] 2. Warranty of freedom from encumbrances
[sec.14(c)]

3. Warranty as to quality or fitness by usage of trade [sec16(4)] 4. Warranty to disclose dangerous nature of goods

CAVEAT EMPTOR
In a contract of sale of goods the seller is under no duty to reveal unattractive truths about the goods sold. Therefore, when a person buys some goods, he must examine them thoroughly. If the goods turn out to be defective or do not suit his purpose, he cannot blame anybody excepting himself.

DOCTRINE OF caveat emptor Caveat Emptor is a fundamental principle of the law of sale of goods. It means "Caution Buyer", i.e. "Let the buyer beware". In other words, it is not the duty of the seller's duty to point out defects of his own goods. The buyer must inspect the goods to find out if they will suit his purpose. ExPigs were sold "subject to all faults", and these pigs, being infected, caused typhoid to other healthy pigs of the buyer, it was held that the seller was not bound to disclose that the pigs were unhealthy. The rule of the law being 'Caveat Emptor'. [Goddard v. Hobbs 1878, 4 App. Cas. 13]. Exceptions 1. Where the seller makes a false representation and buyer relies on that representation. The rule of "Caveat Emptor" will not apply and the buyer will be entitled to the goods according to that representation;

2. Where the seller actively conceals a defect in the goods, so that on a reasonable examination the same could not be discovered. 3. Where the buyer makes known to the seller the purpose for which he is buying the goods, and the seller happens to be a person whose business is to sell goods of that description, then there is an implied condition that the goods shall be reasonably fit for such purpose. The rule of Caveat Emptor will not apply; 4. In case of sale by description, there is implied condition as to their being of merchantable quality. However, if the buyer has examined the goods, this condition of "merchantability" extends only to hidden or latent defects. The defects, which such examination ought to have revealed, are not covered, i.e., the rule of Caveat Emptor will be applicable.

Ex In Donoghue v. Stevenson (the `snail in the ginger-beer `case) it was held that manufacturers owed a duty to the ultimate consumer to take care in making their goods where there is no likelihood of their being examined before they reach the ultimate consumer. When does property pass from the seller to the buyer (a) Specific or Ascertained goods - the property in the good is transferred to the buyer at such times the parties to the contract intend to be transferred or when something has to be done by the seller to put them in a deliverable state, property passes only when such thing is done, and the buyer has notice thereof. ExThe whole of the contents of a cistern of oil were sold, and the seller had to put the oil in casks to be then delivered to the buyer. Held, the property did not pass until the oil was.

actually put into casks ready for delivery and the buyer was notified accordingly. [Rugg v. Minett, 1809,11 East 2.101]. (b) Unascertained or Future Goods - property in the goods is not transferred to the buyer unless and until the goods are ascertained ExampleX agrees to sell Y 200 quintals of wheat out or a larger quantity lying in X's store. The agreed price is to be paid on the day appointed under the contract. Unless and until the required quantity of 200 quintals is separated from the larger quantity and the goods have thus been ascertained, property cannot pass from the seller to the buyer.

Thank you