TOPIC : CONDITIONS & WARRANTIES(CAVEAT EMPTOR)

(SOGA,1930)
 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.
 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
CONDITION AND WARRANTY DISTINGUISHED
[SEC.12(2)(3)]
CONDITION
• IT IS ESSENTIAL TO THE MAIN
PURPOSE OF THE CONTRACT.
• THE AGGRIEVED PARTY HAVE A RIGHT
TO REPUDIATE THE CONTRACT AND
CLAIM FOR DAMAGES.
• THIS CAN BE TREATED AS A BREACH
OF WARRANTY.
WARRANTY
1. IT IS COLLATERAL TO THE MAIN
PURPOSE OF THE CONTRACT.
2. THE AGGRIEVED PARTY HAVE A
RIGHT TO CLAIM FOR DAMAGES
ONLY.
3. THIS CAN NOT BE TREATED AS A
BREACH OF CONDITION.
 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.
 BREACH OF WAARANTY(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.
 WHICH ARE WARRANTIES IMPLIED?

• WARRANTY AS TO QUIET POSSESSION.

• WARRANTY AS TO GOODS TO BE FREE FROM

ENCUMBRANCES.
TYPES OF CONDITION
AND WARRANTY
 TYPES OF CONDITION AND WARRANTY

EXPRESSED CONDITION IMPLIED CONDITION

AND WARRANTY AND WARRANTY

IMPLIED CONDITION IMPLIED WARRANTY

• A)
EXPRESS CONDITION AND WARRANTY :
When both the buyer and seller agree to provide for
certain Terms and conditions, either by words spoken And
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.