In the new-age economy, trade, and commerce are increasing extensively, and people are buying products and services. The Sale of Goods Act 1930 governs the sale of all products and services in India. Earlier, these provisions were covered by the Indian Contract Act 1872, but to provide a separate framework, a separate act was required. The Sale of Goods Act 1930 covered some important elements of the Indian Contract Act 1872 to provide a separate act to give a framework to cover the ambit of a sales contract. Conditions and warranties are the rights and remedies available in case of a breach or case of any damage to a contract of sale. The Sale of Goods Act 1930 discusses the provisions of conditions and warranties in contracts concerning the sale of goods.

What is Condition under Sale of Goods Act 1930?

According to Section 12 of the Sale of Goods Act, a condition is a basic phrase that serves as the foundation for the contract. It is a basic obligation and is crucial to the contract. If the stipulated facts are true and the requirements are met, the contract’s purpose is completed. The condition is a fundamental prerequisite for the foundation of all contracts. Every party to the contract must fulfill their portion of the condition, and if there is a violation of the condition, the aggrieved party may treat the deal as rejected. If the seller fails to meet the terms of the sale of the products, the buyer has the right to refuse to accept the items or regard the contract as repudiated.

For example, in a sales contract, if you are purchasing a car and the express condition is that it must be a certain model, obtaining a different model would be considered a breach of contract. This breach of condition allows the offended party to reject the automobile and cancel the contract.

As per Section 12(2) of the Sale of Goods Act 1930, “a condition is a stipulation essential to the main purpose of the contract, the breach of which gives the aggrieved party a right to repudiate the contract itself.”

What is Warranty under Sale of Goods Act 1930?

In Indian contracts, a warranty is essentially an additional assurance to the underlying agreement. If this promise is breached, the harmed individual can seek compensation, but they cannot refuse the products. This assurance also ensures that the items are free of any hidden charges or difficulties that the customer was unaware of when they agreed to the contract. The Sale of Goods Act 1930, which is part of Indian contracts, addresses these agreements for the sale of commodities. It is critical to understand the distinction between conditions and warranties since they define each person’s rights and solutions if an issue arises. If a condition is breached, the innocent party can cancel the contract and seek compensation. But if it’s a warranty, they may only seek reimbursement. Understanding the laws in Indian contracts, particularly where products are involved, is critical for determining what to do if a problem arises.

According to Section 12(3) of the Sale of Goods Act, 1930 “A warranty is a stipulation collateral to the main purpose of the contract, the breach of which gives the aggrieved party a right to sue for damages only, and not to avoid the contract itself.”

Difference between Conditions and Warranties