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.

WARRANTY1. 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.