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What is the difference between a condition and a warranty under the Sale of Goods Act?

GradeHunt_TeamGradeHunt Team · · CA Foundation

I'm preparing Business Laws for CA Foundation. Section 12 says a stipulation can be a condition or a warranty, but in case study questions I can't tell which one it is. Also, when can a buyer reject the goods and when does he only get damages?
sale of goods actcondition and warrantysection 12section 13

1 answer

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Both are stipulations in a contract of sale. What separates them is how close the term is to the main purpose of the contract, and what the buyer can do when it is broken. Condition (Section 12(2)): a stipulation essential to the main purpose of the contract. If it is broken, the buyer can treat the contract as repudiated, which means he can reject the goods and get his price back. Warranty (Section 12(3)): a stipulation collateral to the main purpose. If it is broken, the buyer can claim damages but cannot reject the goods. Section 12(4): the label used in the contract does not decide it. A term called a "warranty" can still be a condition if, read as a whole, the contract shows it was essential. Example: Ravi tells a dealer he needs a pump that can lift water to the third floor, and the dealer picks one for him. It cannot lift water beyond the first floor. Fitness for the stated purpose was essential, so this is a breach of condition and Ravi can return the pump. If the same pump worked fine but the seller had promised a free cover that never came, that is collateral to the main purpose, so it is a warranty and Ravi gets only damages. When a breach of condition is treated as a breach of warranty (Section 13): 1. The buyer may waive the condition, or choose to treat the breach as a breach of warranty. 2. Where the contract is not severable and the buyer has accepted the goods or part of them, he can only claim damages, unless the contract says otherwise. Way to answer a case study: quote Section 12, decide whether the term goes to the root of the contract, then check whether Section 13 has turned the condition into a warranty (acceptance or waiver). End with the remedy: rejection plus refund, or damages only.
GradeHunt_TeamGradeHunt Team · 0 pts ·