Conditions and warranties under the Sale of Goods Act, 1930 are critical classifiers of contractual obligations whose breach carries different remedies and consequences.
## Core Concept
Under the Sale of Goods Act, 1930 (SGA), terms in a contract of sale are classified as either conditions or warranties based on their importance to the contract.
- A condition is a stipulation essential to the main purpose of the contract. Breach of condition gives the buyer the right to reject goods and repudiate the contract (treat it as void) or claim damages.
- A warranty is a stipulation collateral to the main purpose of the contract. Breach of warranty only gives the right to claim damages; the buyer cannot reject the goods.
Key difference: Conditions allow rejection; warranties only allow damages.
## Legal Framework (Section 12–17, SGA 1930)
### Implied Conditions
- Section 12: Seller has a right to sell the goods (at the time of sale).
- Section 14(a): Goods are of merchantable quality (fit for purpose and of acceptable standard).
- Section 14(b): Goods are fit for a particular purpose if the buyer has disclosed that purpose and relied on seller's skill/judgment.
- Section 15: Sale by description — goods must match the description under which they are sold.
### Implied Warranties
- Section 12(2): Goods are free from encumbrances (no third-party claims).
- Section 16: Quiet possession — buyer shall enjoy undisturbed possession.
## Formula / Rule
Determining Condition vs. Warranty:
- At point of sale: Parties' intent governs classification.
- If intent unclear: Apply statutory rules (Sections 12–17).
- Condition can become warranty if buyer elects to waive it or continue with goods after breach becomes known (Section 61).
Remedy framework: - Condition breached → Rejection + damages (or damages alone if buyer waives right) - Warranty breached → Damages only
## Common Exam Applications
Scenario 1: Buyer purchases "Red paint, 10 liters" but receives blue paint. This is breach of Section 15 (condition) — sale by description. Buyer can reject.
Scenario 2: Seller warrants goods are "free from defect" but defect emerges after 3 months of use. If condition: buyer loses right to reject but can claim damages within reasonable time under Section 74 (law of limitation).
Scenario 3: Buyer purchases a car and seller verbally promises "it won't break down for 2 years." If not a written condition under Sections 12–17, it may be collateral warranty; breach allows damages but not rejection (unless fundamental to purpose).
## Common Mistakes
- Confusing condition with warranty based on name: A term labeled "warranty" by parties may legally be a "condition" if it is essential to the contract. Courts look at substance, not label (though parties' intent is primary weight).
2. Assuming warranty gives rejection rights: Warranties grant only damages. Students often wrongly advise rejection for warranty breach.
3. Overlooking Section 61: Once buyer accepts goods or waives the condition, right to reject is lost—remedy becomes damages only. Many students forget that acceptance converts a condition breach to warranty remedy.
4. Ignoring "merchantable quality" nuance (Section 14): Does not mean "perfect"—goods must be fit for ordinary use and of acceptable standard. Minor defects may not breach this condition if goods remain merchantable.
5. Misapplying fitness for purpose (Section 14(b)): Applies only where buyer discloses the purpose and relies on seller's skill. If buyer specifies exact brand/type, reliance may be absent.
## Quick Memory Aid
- Condition = Core / Critical → Can Contradict contract by rejection
- Warranty = Wall (secondary) → Only Wage damages claim