Condition and Warranty

Under 

Condition and Warranty

In a contract of sale, parties make various "stipulations" or promises. These are classified as either conditions or warranties depending on their importance to the main purpose of the contract (Section 12).

Condition [Section 12(2) of the Sale of Goods Act, 1930]

A condition is a stipulation essential to the main purpose of the contract. It goes to the very root of the agreement.

• Effect of Breach: If a condition is broken, the injured party has the right to repudiate (cancel) the contract and claim damages.

• Example: If you buy a car specifically for racing and the seller provides a car that cannot exceed 60 km/h, a condition is breached.

Warranty [Section 12(3) of the Sale of Goods Act, 1930]

A warranty is a stipulation collateral to the main purpose of the contract. It is a secondary or subsidiary promise.

• Effect of Breach: The injured party can only claim damages for the loss suffered but cannot reject the goods or cancel the contract.

• Example: If you buy a car and the cigarette lighter does not work, it is a breach of warranty.

Distinction between Condition and Warranty

Basis	Condition	Warranty
Essentiality	Essential to the main purpose of the contract.	Only collateral (subsidiary) to the main purpose.
Right of Rejection	The buyer can avoid the contract and reject goods.	The buyer can only claim damages; cannot reject goods.
Treatment	A breach of condition can be treated as a breach of warranty.	A breach of warranty cannot be treated as a breach of condition.
Nature	It is the foundation of the contract.	It is an additional promise.