SALEOFGOODS

ACT, 1930.

MADE BY:SIMRAN
ENROLMENT NO:05613403817.
 CONDITIONS AND
WARRANTIES


• In contract
 of sales of goods, Stipulations regarding quality, price, mode of paym
etc. are known Conditions and Warranties
• Condition

– stipulation essential to the main purpose of the contract
• Breach of Condition gives aggrieved party right to repudiate the contract
• In addition, aggrieved party can claim damages from the guilty party
 CONDITIONS AND WARRANTIES

(CONTD.)
 Warranty – a stipulation collateral to the main purpose of the
contract
 Breach of Warranty, gives the aggrieved party right to sue
for damages only
 Aggrieved party can not avoid contract itself
There is no hard and fast rule as to which stipulation in a
 contact is a condition or warranty
 It depends in each case on the construction of the contract
Mere nomenclature is not enough to distinguish
 EXAMPLES

 Breach of Condition
Pgoes to R,a horse dealer, and asks for horse which runs at a
speed of 30 km per hour, Pbuys a horse from R
Later Pfinds that horse can only run at a speed of 20 km
per hour. This is a breach of condition
 Breach of Warranty
P says to R, “I want a good horse”, Rshows him a horse and
says, “ This is a good horse and it can run at a speed of 30
kmper hour”, and Pbuys thehorse
Later, Pfinds that horse can only run20km/hour
DISTINCTION BETWEEN CONDITION AND
WARRANTY
 As to value
Condition – essential to the main purpose of the contract
Warranty – collateral to the main purpose of the contract
 As to breach
Condition – right to repudiate the contract and also to claim
damages
Warranty – right to claim damages only
 As to treatment
Breach of condition may be treated as a breach of
warranty
Breach of warranty cannot be treated as breach of
condition
WHEN BREACH OF CONDITION TO BE TREATED AS
BREACH OF WARRANTY

 Voluntary waiver by buyer

Buyer of goods may treat breach of condition as a breach
of warranty, and accept goods and sue the seller for
damages
E.g. If A agrees to supply B 10 bags of first quality sugar
@Rs. 625 per bag, but supplies only second quality sugar
(Rs.600 per bag)
Buyer may treat it as breach of warranty, accept the goods
and claim damages @Rs. 25 per bag
WHEN BREACH OF CONDITION TO BE TREATED AS
BREACH OF WARRANTY
 Acceptance of goods by buyer
When the buyer accepted goods, but later comes to know of the
breach of contract
Buyer can not reject goods, can only claimdamages
In this case, law treats breach of condition as breach ofwarranty i.e.
does not depend on the will of buyer
In case of indivisible contract, buyer should treat breach ofcondition as
breach of warranty
In case of divisible contract, buyer can repudiate as regards remaining
goods
 CONDITIONS AND WARRANTIES
(CONTD.)

 Express and Implied Conditions andWarranties

 Implied Conditions
Conditions as to title
Condition in a sale by description
Condition in a sale by sample
Condition in a sale by sample as well as by description
Condition as to fitness orquality
IMPLIED CONDITIONS
CONTD..
Condition as to

merchantability
Goods should correspond with description and be ‘merchantable’
quality
ii) Seller
manufacturer or not
iii) The buyer must not have any opportunity to examine the goods or there
must be some latent defect in the goods, which should be apparent on
reasonable examination
 Condition as to Wholesomeness
Implied only in contract of sale of eatables and provisions
Goods should answer to description, must be merchantable and must be
wholesome, i.e., free from any defect which render them unfit.
W bought a bottle of beer from H and the beer was contaminated with
arsenic and W fell ill. H was held liable to W for theillness
IMPLIED
WARRANTIES
 Warranty of quite possession
“the buyer shall have and enjoy quite possession of goods”.
If the buyer is disturbed by a person with superior right than the seller,
the buyer can claim damages from the seller.
Regarded as an extension of the implied condition of the title.
A buys a typewriter and spent money on repairs. It turns out be a stolen
article. A is entitled to get back what he paid plus repair charges.
 Warranty of freedom from encumbrances
“The goods shall be 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 contact is made”
A pledges a watch to B. Later he sells it to C. Btells C about the pledge.
C has to make payment for the pledge amount to B. Here is a breach of
warranty and C can get compensation fromA.
IMPLIED WARRANTIES
(CONTD.)
 Warranty of disclosing the dangerous nature of the goods to the
ignorant buyer
If the goods sold are of dangerous nature, the seller is bound to warn the
ignorantbuyer.
Buyer entitles to claim damages for injury in case of a breach of
warranty.
C purchases a tin of disinfectant powder from A. A knows the lid is
defective and if opened without special care it may be dangerous but
tells nothing to C. C opens the tin in the normal way and gets injured. A is
liable in damages to C as he should have warned C of the probable
danger.
DOCTRINE OF CAVEAT
EMPTOR
 “let the buyer beware”
 It is the duty of the buyer to be careful while purchasing goods of his
requirement
 The buyer must examine the goods thoroughly and must ensure they serve the
purpose for which he wants them
 No implied undertaking by the seller that he shall supply goods to suit the
buyer’s purpose
 Ex. A buys a horse from Bfor riding – but did not mention this. The horse was
found fit only for carriage. A cannot claim damage.
EXCEPTIONS OF THE DOCTRINE OF CAVEAT
EMPTOR
 Seller makes a misrepresentation and the buyer relies on it. Buyer has a
right to rescind the contract.
 Seller makes a false representation amounting to fraud or seller conceals a
defect in the goods
 Goods purchased by description and do not correspond with the
‘description’
 Goods purchased by description are of not ‘merchantable quality’. But the
doctrine applies, if the buyer examined the goods where such examination
ought to have revealed the defect.
 If the bulk does not correspond with the sample or if the buyer is not
provided an opportunity to compare the bulk with the sample or if there is
any hidden or latent defects in the goods.
EXCEPTIONS CONT…

 Goods bought by sample as well as description and the bulk does not
correspond with the both, the buyer is entitled to rejectit.
 Buyer makes known to the seller the purpose for which he requires the goods
and relies upon the seller's skill but the goods supplied are unfit for that
purpose.
 Trade usage attaches an implied condition or warranty as to quality or
fitness and the seller deviated from that, the seller isliable in damages.
THANK YOU