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Subject: LAW ON SALE OF GOODS & C.P.

Class: BB.A.LL.B. & B.COM.LL.B. (Sem. II)


University Institute of Legal Studies
Compiled By - Sukhwinder Singh, Asstt. Professor 1

www.cuchd.in NOTE: ONLY FOR ACADEMIC PURPOSES Campus: Gharuan, Mohali


CONDITIONS & WARRANTIES
VISION
WHAT IS CONDITION?

A CONDITION IS A STIPULATION ESSENTIAL TO THE MAIN PURPOSE OF THE CONTRACT, THE BREACH OF
WHICH GIVES RIGHT TO REPUDIATE THE CONTRACT AND TO CLAIM DAMAGES.
EXAMPLE: P GOES TO R, A HORSE DEALER, AND SAYS, I WANT A HORSE WHICH CAN RUN AT A SPEED OF 30
KM. PER HOUR. THE HORSE DEALER POINTS OUT A PARTICULAR HORSE AND SAYS, THIS WILL SUIT YOU. P
BUYS THE HORSE. LATER ON P FINDS THAT THE HORSE CAN RUN ONLY AT A SPEED OF 20KM./HR. THERE IS
A BREACH OF CONDITION, P CAN REPUDIATE THE CONTRACT, RETURN THE HORSE TO R AND GET BACK THE
PRICE.

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VISION
WHAT IS WARRANTY?

A WARRANTY IS A STIPULATION COLLATERAL TO THE PURPOSE OF THE CONTRACT, THE BREACH OF WHICH
GIVES THE AGGRIEVED PARTY A RIGHT TO SUE FOR DAMAGES ONLY, AND NOT TO AVOID THE CONTRACT.
EXAMPLE: ASSUME THAT A FARMER, INTENDING TO PLANT NO-TILL SOYBEANS, APPROACHES A SELLER TO
BUY HERBICIDE. ASSUME FURTHER THAT THE BUYER REQUESTS A PARTICULAR HERBICIDE MIX BUT THE
SELLER SUGGESTS A LESS EXPENSIVE MIX. IF THE CHEMICALS FAIL TO KILL CRABGRASS AND THE FARMER HAS
A LOW YIELD OF SOYBEANS, THE FARMER COULD SUE THE SELLER FOR BREACH OF THE WARRANTY OF
FITNESS FOR A PARTICULAR PURPOSE BECAUSE THE SELLER KNEW WHAT THE FARMER REQUIRED.

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VISION

BREACH OF WARRANTY(SEC.13)

WHEN BUYER WAIVES THE PERFORMANCE OF THE CONDITION.


WHEN BUYER ELECTS TO TREAT BREACH OF THE CONDITION AS BREACH OF WARRANTY AND DOES NOT
TREAT THE CONTRACT AS VOID.
WHEN THE CONTRACT OF SALE IS INSEPARABLE AND THE BUYER HAS ACCEPTED THE WHOLE GOODS OR
PART THEREOF.
WHEN THE FULFILLMENT OF ANY CONDITION OR WARRANTY IS EXECUTED BY LAW BY REASON OF
IMPOSSIBILITY OR OTHERWISE.

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CONDITION & WARRANTY
VISION DISTINGUISHED
CONDITION AND WARRANTY DISTINGUISHED [SEC.12(2)(3)]

S. NO. CONDITION WARRANTY

1. Essential to the main purpose of the contract. Collateral to the main purpose of the contract.

2. Aggrieved party has a right to repudiate the Aggrieved party has a right to claim damages
contract and claim damages. only.

3. Can be treated as a breach of warranty. Cannot be treated as breach of condition.

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VISION

TYPES OF CONDITION AND WARRANTY


A) EXPRESS CONDITION AND WARRANTY : When both the buyer and seller agree to provide for
certain Terms and conditions, either by words spoken or written, they are known as express condition
and warranty .
B) IMPLIED CONDITION AND WARRANTY : It is open to the parties to include in their contract any
number of express conditions and warranties. But in addition to what the contract may provide, the law
implies into every sale of goods a number of conditions and warranties. They are read into every
contract of sale unless they are expressly excluded. These are called as implied conditions and
warranties . section 14 to 17 deals with implied conditions and warranties.

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VISION

WHAT ARE IMPLIED CONDITIONS?

IMPLIED CONDITIONS ARE THOSE, WHICH ARE PRESUMED BY LAW TO BE PRESENT IN THE CONTRACT.
IMPLIED CONDITION MAY BE NEGATED OR WAIVED BY AN EXPRESS AGREEMENT.
1. CONDITION AS TO TITLE
2. SALE BY DESCRIPTION
3. SALE BY SAMPLE
4. SALE BY SAMPLE AS WELL AS DESCRIPTION
5. CONDITION AS TO QUALITY OR FITNESS
6. CONDITION AS TO WHOLESOMENESS.

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IMPLIED CONDITION AS TO TITLE SEC. 14 (a)
VISION

In every contract of sale, unless the circumstances are such as to show different intention,
there is an implied condition on the part of the seller that in case of sale, the seller has a right
to sell the goods and in the case of agreement to sell, he will have a right to sell the goods at
the time when the property in them is to pass.
Generally, the owner or agent of owner has right to sell goods.
If a person has no title to dispose goods, the buyer has right to reject them and claim back the
price.
Rowland v. Divall; (1923) 2 K.B. 500.

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IMPLIED CONDITION IN SALE BY DESCRIPTION SEC. 15
VISION

When the goods are sold by description, there is an implied condition that the goods supplied
shall correspond with the description.
In case the goods are not in accordance with the description, there is a breach of implied
condition and the buyer has a right to reject the goods.
Buyer also has an option to treat the breach of condition as a breach of warranty.
Varley v. Whipp; (1900) 1 Q.B. 513.
Manbre Saccharine Co. v. Corn Products Co.; (1919) 1 K.B. 198.

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IMPLIED CONDITION IN SALE BY SAMPLE AS WELL AS
VISION
DESCRIPTION SEC. 15

When the goods are sold by sample as well as description, it is not sufficient that the bulk of the
goods corresponds with the sample if the goods do not correspond with the description.
Buyer has a right to reject the goods, because the fundamental condition in every contract is
that the goods should correspond to the description.
Wallis v. Pratt; (1911) A.C. 394.
Nichol v. Godts; (1854) 10 Ex. 191.

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RULE OF CAVEAT EMPTOR SEC. 16
VISION
Section provides, as a general rule, that there is no implied warranty or condition as to the quality or fitness
for any particular purpose of the goods supplied under a contract of sale.
It is incorporation of the rule contained in the maxim caveat emptor, which means buyer beware.

EXCEPTIONS TO THE RULE OF CAVEAT EMPTOR


1. Implied condition as to Quality or Fitness Sec. 16(1).
a. the buyer, while purchasing the goods, expressly or impliedly, makes known to the seller that the
particular purpose for which the goods are required by him, so as to show that the buyer relies on
sellers skill and judgment.
b. goods supplied are of such a description which it is in the course of sellers business to supply.
Raghava Menon v. Kuttappan Nair; AIR 1962 Ker. 318.
Priest v. Last; (1903) 2 K.B. 148.
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VISION

No implied condition when the sale under Patent or Trade Name Proviso to Sec. 16 (1).
2. Implied condition of Merchantable Quality Sec. 16 (2)
When the goods are sold by description, there is an implied condition that the goods supplied shall answer
that description.
According to this sub-section, there is a further implied condition that in such a case the goods supplied
shall be of merchantable quality.
Where a. the goods are brought by description and
b. from a seller who deals in the goods of that description,
there is an implied condition that the goods shall be of merchantable quality (a reasonable man, after full
examination, would accept the goods).
Condition negatived when the goods examined by the buyer proviso to Sec. 16 (2).

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IMPLED CONDITION INVISION
A SALE BY SAMPLE SEC. 17

A contract of sale is by sample when there is a term in the contract, express or implied, to that effect.
The purpose is to present to the eye the real meaning and intention of the parties with regard to the
subject-matter of the contract .
Three implied conditions in a contract of sale by sample
a. The bulk shall correspond with the sample in quality.
b. The buyer shall have reasonable opportunity of comparing the bulk with the sample to satisfy
himself that the goods supplied are in accordance with the sample.
c. The goods shall be free from any defect, rendering them unmerchantable which would not be
apparent on reasonable examination of the sample.

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