Concept of Conditions
In the context of the Sale of Goods Act, 1930, a condition refers to a fundamental stipulation that is essential to the main purpose of the contract. If a condition is breached, the aggrieved party has the right to repudiate (terminate) the contract as well as claim damages. Section 12(2) of the Sale of Goods Act defines a condition as a stipulation essential to the main purpose of the contract. For example, when goods are sold by description, there is an implied condition that the goods will correspond with the description given (Section 15).
In cases of sale by sample, it is implied under Section 17 that the bulk must correspond with the sample in quality. Thus, conditions form the very backbone of a sales agreement and their performance is mandatory for the contract to stand valid. The breach of a condition strikes at the root of the contract and goes beyond mere compensation, as it undermines the primary purpose for which the agreement was entered into. Therefore, in legal practice, conditions are treated with utmost importance, forming the decisive factor in upholding or rescinding contractual obligations.
Concept of Warranties
Unlike conditions, a warranty is a stipulation that is collateral to the main purpose of the contract. As per Section 12(3) of the Sale of Goods Act, 1930, a warranty is a secondary obligation in a contract, the breach of which does not entitle the buyer to reject the goods or repudiate the contract but only to claim damages. Warranties are essentially assurances or promises regarding the quality, suitability, or performance of the goods but are not so vital that their breach would undermine the entire contract.
For instance, if goods are purchased with a warranty of repair within six months, the buyer cannot refuse to accept the goods on the ground that they required minor repairs; instead, he is entitled to get them repaired or claim damages. Sections like 14 of the Act also imply warranties regarding quiet possession of goods and freedom from undisclosed encumbrances. Thus, warranties operate as supportive terms ensuring confidence in performance but not as core stipulations. The legal distinction is vital, as the remedies available for their breach are limited to damages, unlike in the case of conditions, where the buyer may also rescind the contract.
Difference Between Conditions and Warranties
The distinction between conditions and warranties lies in their relative importance to the contract. A condition is central to the contract; its breach gives rise to repudiation of the contract along with a claim for damages, as provided under Section 12(2). On the other hand, a warranty is subordinate or collateral; its breach does not affect the existence of the contract, and the buyer is only entitled to claim damages as under Section 12(3). For example, if a buyer orders a new car and receives a second-hand car, the breach goes to the root of the contract and is thus a breach of condition.
However, if the buyer receives the new car but finds that the stereo system is not working, that would amount to a breach of warranty, since it does not defeat the main purpose of the contract. Another important legal point is that, as per Section 13, a buyer may waive a condition or elect to treat a breach of condition as a breach of warranty. This principle shows that the law allows some flexibility to the buyer depending on circumstances, but the general rule remains that conditions safeguard the essence of a contract, while warranties serve to assure its smooth performance.
Real-time Example
Consider a scenario where a customer purchases a laptop from an electronics retailer. The customer specifies that the laptop must have 16 GB RAM and a dedicated graphics card for high-end design software. If the delivered laptop has only 8 GB RAM, this constitutes a breach of condition, as the primary requirement (performance capability) is not met. The buyer can reject the laptop and cancel the contract entirely. However, suppose the laptop has the specified configuration but comes with a warranty promising free service for one year, and the service center later refuses to repair a minor issue under that warranty.
In that case, the breach is of a warranty, not a condition. The buyer cannot repudiate the entire contract or return the laptop; instead, he can only claim damages or demand that the warranty be honored. This real-time example shows how conditions protect the buyer’s main objective, while warranties serve to protect supplementary interests. It also reflects how courts draw a line between essential and collateral obligations, ensuring that remedies are proportionate to the seriousness of the breach.
Mnemonic
To remember the distinction between conditions and warranties, we can use the mnemonic: “CORE vs. SUPPORT”.
- C – Condition is the Core of the contract.
- O – Breach gives right to Oppose or cancel the contract.
- R – Remedy includes Repudiation + damages.
- E – Example: Buying a new car but getting an old car (fundamental breach).
On the other hand:
- S – Warranty is Supportive in nature.
- U – Breach gives right to Use goods but claim damages.
- P – Remedies are limited to Price adjustment or compensation.
- P – Performance of the main contract still continues.
- O – Only damages, not repudiation, allowed.
- R – Example: Faulty car stereo system, but car still usable.
- T – Treated as collateral to main purpose.
By associating Condition = CORE and Warranty = SUPPORT, students and practitioners can quickly recall the legal consequences. This simple mnemonic framework captures the statutory distinction under Section 12 of the Sale of Goods Act, 1930, and helps in remembering how remedies differ in practice.
About lawgnan:
Mastering the concepts of conditions and warranties is crucial for excelling in LLB exams and practical legal applications. At Lawgnan.in, we simplify these complex topics with structured notes, clear examples, and memory tricks like CORE vs. SUPPORT. Our detailed study resources explain statutory provisions, real-life illustrations, and case-based applications, ensuring you grasp not just the definitions but also their legal implications. Whether you are revising for exams or preparing for professional practice, Lawgnan provides everything you need in one place. Visit Lawgnan.in today and strengthen your foundation in contract law with confidence.
