Concept of Condition and Warranty

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If buyers purchase products from a seller, the two parties engage in an agreement, which is called the sales contract. Besides offer and consideration, some of the main components of this document also include warranty and conditions. 

Most buyers are not aware of the legal aspects of the concept of condition and warranty as well as their importance concerning the purchase and sale of goods. 

Concept of Condition and Warranty

All contracts must contain specific warranty terms and conditions to be considered valid. According to the Sale of Goods Act, 1930, the purchase of goods and service can also be regarded as a contract law; hence one should know the condition and warranty in contract law.

Warranty and conditions can be defined as stipulations, obligations or provisions directly associated with goods or services that buyers and sellers impose on each other. Any breach in conditions will lead to rejection or cancellation of agreements. 

Apart from this meaning of condition and warranty, one should note that breach in conditions will also lead to a violation of warranty. In such a situation, the non-defaulting party can not only cancel the contract but also claim appropriate reimbursement on condition warranty.

Hence, conditions are an indispensable part of a sales agreement which all parties need to fulfil for the successful execution of the contract.

Types of Conditions

An agreement of sale can contain two types of conditions & warranty. These are as follows – 

  • Implied Conditions 

Implied condition contract law refers to those terms and obligations that are not mentioned but as per law should have been stated in the agreement. These include – 

  1. Implied Understanding Regarding Title

Unless otherwise stated, it is implied on the part of a seller that he or she holds the right to sell the goods. Additionally, during a sale, it is also implied that the seller is the owner and therefore holds the rights of transferring the title of goods to a buyer. 

Consequently, if later the goods turn out to be defective, then the buyer can claim damage according to condition and warranty in the contract. It is also implied that the goods will be free from any fraudulent charge from a third party.

  1. Implied Knowledge of Quality and Fitness 

There is no implied condition and warranty in the law regarding product quality and fitness.  However, it is implied that the product should be suitable for the purpose mentioned in situations where 

  • A buyer is relying on a seller’s skill and judgement for a particular product 

  • Has informed him or her regarding the purpose of a product, 

  • The seller can supply the product 

  1. Sale by Description 

If goods are being sold through descriptions only, warranty and conditions imply that goods will conform to the description given. Furthermore, in situations where goods are sold through both sample and description, then the end-product should be in accordance with both.

  1. Sale by Sample

In case of agreements where products are being sold by samples, then as per implied warranty and conditions, bulk products will be according to the quality of this model shown. Moreover, buyers should be given ample time to compare bulk products with samples. End products will also be free of any defect which cannot be detected during examination of a model and which will prevent the buyer from utilising them.

  1. Expressed Conditions

Terms and stipulations, which are stated explicitly on an agreement of sale, are called expressed warranty and conditions. A buyer should go through these conditions to gain a thorough understanding of the product and sale agreement before buying. It is crucial as buyers cannot take any action against a seller if they have any issue regarding any condition which was mentioned on the contract of sale.

What is a Warranty?

Warranty Sale of Goods Act, 1930, is a kind of certification provided by the manufacturer to the buyer regarding the quality and authenticity of the product. Unlike condition, it is indirectly associated with the primary object of the agreement of sale. 

Any breach in warranty and conditions does not result in cancellation of the contract. However, buyers can claim reasonable reimbursement in case the product is defective or damaged and do not perform as effectively. 

Like conditions, a warranty can either be expressed or implied. Seller’s certification or statement regarding the capacity, quality, and the authenticity of the product on the agreement of sales can be considered an express warranty. If an electrical appliance contains the statement ‘made in India’, then the seller or manufacturer is expressly guaranteeing that it has been manufactured in India.

The seller or manufacturer’s conduct can also be considered as an expressed warranty and conditions. For instance, if the buyer asks for waterproof makeup, and the seller hands him or her any product, the latter’s action expresses the fact that the makeup is waterproof.

However, implied warranty and conditions are not given by the seller; instead, it is created by the law. Implied contracts are created automatically when a sale is made. The main types of implied warranty are merchantability, fitness, and title. 

FAQ (Frequently Asked Questions)

Q1. How do You Define the Condition and Warranty?

Ans. Conditions are obligations that buyers and sellers need to abide by for successful execution of the sales contract. Warranty is a surety provided by sellers to buyers regarding the authenticity and quality of the product.

Q2. What are the different Types of Implied Warranty?

Ans. Merchantability allows buyers to assume that the good bought by them will meet their expectations and not have any defects that will render them unusable. Warranty and conditions of fitness provide protection to both buyers and sellers when the former buys a product for a purpose; it was not manufactured for. 

Warranty and conditions of title guarantee that the seller holds the legal rights for selling a particular product and that he or she is not offering stolen goods for sale.

Q3. What does Sale by Sample Imply with Regards to Types of Conditions?

Ans. Sale by sample claims that when selling products in bulk, the sample quality should match the quality of products that a buyer acquires after receiving this bulk shipment. In such cases, the model shown is taken as the standard of the end product.