A condition is a stipulation, essential to the main purpose of the contract (i.e. it is of a fundamental nature), e.g.

quality of the goods, the breach of which gives rise to a right to treat the contract as repudiated; Whereas, A warranty is a stipulation collateral to the main purpose of the contract (i.e. it is only subsidiary and additional to it), e.g. the time of payment of the price of the goods, the breach of which gives rise to a claim for damages, but not to a right to reject the goods, and treat the contract as repudiated. Further, the buyer cannot reject the goods so purchased by him. Further, a stipulation may be deemed to be in the nature of a condition, though it has been referred to as a warranty in the contract of sale. However, a breach of warranty may not be treated as a breach of condition under any circumstances.

When to treat a Condition as a Warranty?

(a)Waiver of condition
Where the contract of sale is subjected to any condition, to be fulfilled by the seller, the buyer mayi. ii. Prefer to waive the condition or Elect to treat a breach of condition as a breach of warranty, instead.

(b)Compulsory treatment of a breach of condition as a breach of warranty, instead.

Where the contract of sale is not separable, and the buyer has accepted the entire goods, or even a part of it, a breach of any condition to be fulfilled by the seller can only be treated as a breach of warranty, but not if the contract of sale provides otherwise.

Express and Implied Conditions and Warranties

Express conditions and warranties are those where the terms stipulated in the contract of sale itself expressly provide for them as such. Implied conditions and warranties are those where, though the terms stipulated in the contract of sale itself do not expressly provide for them as such, the law deems their (i.e. of conditions and warranties) existence in the contract.

Express and Implied Conditions and Warranties

But then, the implied conditions and warranties may be negated by express terms and conditions to the contrary, stipulated in the contract of sale. This is based on the maxims:
(a) Expressum facit cessare tacitum, which means What is expressed makes what is implied to cease, and (b) Modus et conventio vincunt legem, which stands for Custom and conventions overrule law.

However, there may be any type of express conditions and warranties, like the buyer will not sell the goods purchased by him below a certain price, or that the delivery of the goods will be made by the seller or taken by the buyer on or before a specified date.

The following implied conditions and warranties are presumed where the terms and conditions stipulated in the agreement of sale of goods do not provide an intention to the contrary: (a)Conditions as to Title
(i) That the seller already has the right (title) to sell the goods. (ii) That the seller will have the right to sell the goods at the time when the property (ownership) of the goods involved will be passed on from the seller to the buyer. In case the sellers title to the goods is found to be defective, the buyer will be entitled to reject the goods and claim the refund of the price, if paid, Besides claiming the damages, even if the buyer would have used the goods so supplied.

(b) Condition in the Sale by Description In such cases, there is an implied condition that the goods, supplied or to be supplied, shall correspond to the description of the goods agreed upon. In the case of a contract for the sale of goods by sample as also by the description of the goods involved, the goods should be in conformity with the sample of the goods as also should also in conformity with the description of the goods agreed upon.

(c) Conditions as to Quality or Fitness The general rule is that a buyer is supposed to satisfy himself about the quality of goods he is purchasing, and that these will be suitable for the purpose for which he was buying it. However, only under some exceptional circumstances, where all the three following conditions are fulfilled, there is an implied condition as to the quality or fitness of the goods:
(i) That the purpose for which the goods were being purchased must be made known to the seller, expressly or impliedly; (ii) That the buyer must have relied on the skill, knowledge or judgement of the seller; and (iii) That the selling of such goods must be the usual business of the seller. But, the aforementioned exception will not apply in the cases where the goods in question are sold under their patent or trade name.

(d) Merchantable Quality The term merchantable quality, may be defined as an article which must be such that a reasonable person would accept the article as the performance of a promise. But then, in the cases where the buyer has himself examined the goods prior to the sale, there will be no implied condition as to the merchantability of the goods sold, in regard to the defects which such examination would have revealed. But, in a case where, despite a proper and though examination by the buyer of the goods under sale, some latent defects in the goods were of such a nature that no examination could have detected (revealed), there will be implied condition as to the merchantability of the goods sold, in regard to the defects.

However, the condition regarding the merchantability of the goods sold, must be reasonably construed, because the seller cannot be held responsible, if certain facts were not disclosed to the seller, but these were concealed from him, instead, which itself had given rise to the element of unsuitability of the goods so purchased.

A contract of sale by sample is when there is a term in the contract of sale to this effect, whether in express or implied terms. But, if there is no term in the contract of sale to this effect, it will be presumed that the sample, though shown, it is not shown as a warranty, but only to facilitate the buyer to form a reasonable judgement about nature, composition, quality, and so on, about the goods. The following are the implied conditions in the case of a sale by sample:
(a) (b) (c) That the bulk of goods will correspond to the sample in quality; That the buyer will have sufficient opportunity to compare the bulk of goods supplied with the sample; and That the goods supplied will be free from any defects, which may render them non-merchantable, which may not be apparent on a reasonable examination of the sample.

There are the following two types of implied warranties: (a) (b) Warranty of quiet possession, and Warranty of freedom from encumbrances, provided the encumbrances, if any, are neither known to, nor declared to, the buyer.

Summary of Implied Conditions

(i) Conditions as to title; (ii) Condition in the sale by description is that the goods must correspond to the description; (iii) Conditions as to quality or fitness, in some cases; (iv) Condition that the goods must be of merchantable quality; and (v) In case of sale by sample:
(a) Bulk of goods must correspond with sample; (b) Buyer must have reasonable opportunity to compare the bulk of goods with the sample; and (c) Goods must be free from any defects which may render them as non-merchantable.

Summary of Implied Warranties

(i) Warranty of Quiet Possession (ii) Warranty of Freedom from Encumbrances

Principle of Caveat Emptor

The term caveat emptor means in English as let the buyer be ware or simply as buyer be ware or caution buyer .

Thus, it is the duty of the buyer to inspect and examine the goods he intends to buy, and to satisfy himself that they are free from any defects and that they will suit the purpose for which he is buying the goods in question. Thus , it is not the duty of the seller to disclose the defects in the goods, if any, that he is selling.

f ll ing inci le In t e following cases t e f ndamental principle of aveat Empt f Emptor will not appl : ill
(i) Where the seller makes a false representation and the buyer relies thereon, (ii) Where the seller actively conceals any defect in the goods being sold by him, so that the defect involved in the goods may not be detected even on a reasonable inspection and examination of the goods, (iii) Where the buyer, expressly or impliedly, tells the seller the specific purpose for which he was buying the particular goods, he was thereby making the seller realise that he (buyer) was relying on the knowledge, skill and judgement of the seller of the goods. Further, the goods should be of such a description the supply whereof is in the sellers usual course of business, whether he manufactures or produces the goods under sale or not.

In the following cases the fundamental principle of Caveat Emptor will not apply:
(iv)Where the goods are sold by description, there is an implied condition that the goods will be of merchantable quality. Accordingly, in such cases also the principle of caveat emptor will not apply. (v) But, where the buyer has himself examined the goods prior to the sale, there will be no implied condition as to the merchantability of the goods sold, in regard to the defects which such examination would have revealed. Accordingly, in such cases the principle of caveat emptor will apply.

In the following cases the fundamental principle of Caveat Emptor will not apply:
(vi) However, where, despite a proper and though examination by the buyer of the goods under sale, some latent defects in the goods were of such a nature that no examination could have detected (revealed), there will be implied condition as to the merchantability of the goods sold, in regard to the defects. Accordingly, in such cases the principle of caveat emptor will not apply.