Concept of Condition and Warranty - Introduction
When we purchase various products we tend to check the manufacturing date and company, expiry date or year of the expiry of the warranty, check the nutritional count if it is a food product and so on. We perform a thorough quality check and go through the terms and conditions before purchasing any product. Especially if we purchase electronic goods like a laptop we are more careful than ever in checking for its specs, manufacturer and seller, the quality of the piece and the year until when its warranty is valid.
When we go for intangible services too, we tend to check the reliability of a service provider and quality of services offered before making a decision, be it checking into a 5-star hotel, booking vacation packages or installing WiFi at home.
A sales agreement happens when a buyer and a seller thus engage in a material transaction. Warranty and conditions are two important components of this transaction.
What are a Condition and Warranty?
Conditions can be defined as certain obligations, terms or provisions that are associated with the transaction between a buyer and seller. Breach of these conditions can lead to cancellation of agreement and violation of warranty. The non-offending party can also claim appropriate reimbursements and cancel the existing contract as well. A warranty can be expressed or implied.
What are the Types of Conditions?
Implied conditions are those terms that are not explicitly stated but rather understood and legalised as per the law -
Implied Understanding Regarding Title - Here, it is implied that the seller can sell his goods with all rights and transfer ownership to the buyer. It is understood that before the transaction takes place, the seller is the owner of the goods. In case of any defects, the buyer can claim damages as per the conditions and warranty. It is implied that no fraudulent third party charges will be imposed upon the goods.
Implied Knowledge of Quality and Fitness - The buyer engages in a transaction with the seller with the belief that about the seller’s skill, that he can sell appropriate goods and the seller is aware of the intentions of the buyer.
Sale by Description - If the goods are being sold as per the description of the product, then the warranty and conditions will be in accordance with the same. If there is a sample involved as well, then the warranty and conditions will again conform to both.
Sale by Sample - When products are being sold as per the samples earlier marketed, it is implied that the warranty and conditions for the bulk products have to match the quality of the original sample. Buyers should receive sufficient time to compare what they purchase with the quality of the sample and check for defects if any.
Expressed Conditions - The terms and conditions that are explicitly stated in the sale agreement are known as express conditions. Buyers should go through this and have a complete understanding before purchasing.
FAQs on Understanding Condition and Warranty in Contracts
1. How do we define condition and warranty?
The act of purchasing goods and services is a contract law as per the Sales of Goods Act, 1930 and it is clearly stated that every valid contract law contains certain conditions and warranty. Hence, warranty and conditions are defined as a set of obligations of provisions that are imposed by buyers and sellers on each other when they transact material goods and intangible services. Any breach in conditions also means a violation of the warranty.
2. What are the different Types of Implied Warranty?
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.
3. What does Sale by Sample Imply with Regards to Types of Conditions?
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.
4. What do you mean by implied knowledge of quality and fitness?
If we take the quality and fitness of a product, there is no implied condition or warranty that exists in the law. But it is implied or understood that a product is suitable when -
The buyer depends on the seller’s skill and judgement of a product
The buyer has informed the seller of his purpose in looking for a product
The buyer knows that the seller can supply the product
5. What is an expressed and implied warranty?
When the seller provides an authentic certification or statement regarding the quality and capacity of a product for sale, it is taken to be an express warranty. For example, if the product has a label that says “Valid for 3 Months from Date of Manufacturing”, it means the seller is guaranteeing that the product will be valid to use for a stipulated period from the manufacturing date which can also be found on the body of the product itself. An implied warranty is when the conditions and warranty are not by the seller but by the law itself. Merchantability, fitness and title are the main types of implied warranty.
6. What are the different types of conditions?
Conditions are associated with obligations or stipulations that buyers and sellers impose upon each other when engaging in the process of material transactions. Types of conditions include -
Implied Conditions
Implied Understanding Regarding Title
Implied Knowledge of Quality and Fitness
Sale by Description
Sale by Sample
Expressed Conditions
7. What do we mean by implied understanding regarding title?
It is implied that the seller holds the right to sell goods and services and transfer ownership to a buyer unless otherwise implied. The buyer may claim damage as per the warranty and conditions if the goods are found to be defective.
