Condition and Warranty

Sociology | Mercantile Law | International Law | International Relations

Agreements and contracts are in fact the meetings of minds on certain terms, statements and promises. In every contract, there are some promises which formulate its base and their fulfillment is of utmost importance while some terms are mere formalities and their performance is not as essential as those of which give base to contract.

Condition
Section 12(2) of the sale of goods act states that, “A condition is a stipulation, essential to the main purpose of the contract, the breach of which gives ride to a right to treat the contract as repudiated.”

From the above mentioned definition of ‘Condition’ we can debate over following points;

  • A condition is a ‘Stipulation’. The word ‘Stipulation’ pertain to the meanings of ‘the requirement of something as an essential condition of a contract’. It means that, a condition forms the very basis of a contract.
  • A condition is always directly related to the main purpose of the contract and it’s essential to be taken care of for the performance of contract.
  • The breach of condition will provide the injured party with the right to cancel the contract.

Warranty
Section 12(3) of the Act states that, “A warranty is a stipulation, collateral to the main purpose of the contract, the breach of which gives rise to the claim for damages but not the right to reject the goods and to treat the contract repudiated.”

The worth mentioning points in this definition are following;

  • Unlike condition, warranty is a stipulation not essential for the main purpose of the contract but it is collateral to the main purpose. ‘Collateral’ means that its essentiality runs side by side to the purpose of contract.
  • The breach of warranty unlike condition will not repudiate the contract but it will provide the injured party with the right to just receive damages.