In the Sale of Goods Act, 1930, the law assumes certain "implied" terms are part of every contract, even if the parties don't explicitly mention them. These terms are categorized based on their importance into Conditions (essential terms) and Warranties (collateral terms).
1. Implied Conditions
A breach of an implied condition gives the buyer the right to repudiate (cancel) the contract and claim damages.
Condition as to Title (Section 14a): There is an implied condition that the seller has the right to sell the goods. If the seller’s title is defective, the buyer can return the goods and get their money back.
Sale by Description (Section 15): If goods are sold by description, they must strictly correspond with that description.
Sale by Sample (Section 17): The bulk must correspond with the sample in quality, and the buyer must have a reasonable opportunity to compare them.
Condition as to Quality or Fitness (Section 16): Generally, there is no implied condition as to quality (Caveat Emptor). However, if the buyer makes the specific purpose known to the seller and relies on the seller's skill, the goods must be fit for that purpose.
Merchantable Quality: The goods must be of such quality that a reasonable person would accept them as being what they are described to be.
Condition as to Wholesomeness: In the case of food and eatables, there is an implied condition that the goods are fit for human consumption.
2. Implied Warranties
A breach of a warranty only gives the buyer a right to claim damages, but not to reject the goods.
Quiet Possession (Section 14b): An implied warranty that the buyer shall have and enjoy quiet possession of the goods without interference.
Freedom from Encumbrances (Section 14c): The goods are implied to be free from any charge or "lien" in favor of a third party that was not declared to the buyer.
Disclosure of Dangerous Nature: If the goods are inherently dangerous and the seller is aware of it, they must warn the buyer.
3. When is a Breach of Condition treated as a Breach of Warranty?
Under Section 13, there are specific instances where the law prevents a buyer from rejecting the goods, even if an essential condition is broken.
A. Voluntary Waiver (Section 13-1)
Waiver by Buyer: The buyer may altogether waive the performance of the condition.
Election by Buyer: The buyer may choose to treat the breach of condition as a breach of warranty and merely claim damages instead of canceling the contract.
B. Compulsory Waiver (Section 13-2)
In these cases, the buyer has no choice but to treat the breach as a warranty:
Non-Severable Contracts: If the contract is not "severable" (meaning it is for a single unit or set) and the buyer has accepted the goods or even a part of them.
Passing of Property: Once the "property" (ownership) has passed to the buyer, any breach of condition can generally only be treated as a breach of warranty.
C. Excuse by Law
If the fulfillment of the condition is excused by law due to impossibility or other legal reasons, the seller is not liable for the breach.
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