Conditions AND Warranties

Definition of Condition [Section 12(2)]

A ‘Condition’ is a stipulation essential to the main purpose of the contract, the breach of which gives rise to a right to reject goods and treat the contract as repudiated‘[Sec.12(3)]. In addition,he may maintain an action for damages for loss suffered,if,any,on the footing that the whole contract is broken and the seller is guilty of non-delivery.

Ex: Ram consults shyam,a motor car dealer for a car suitable for touring purpose to promote the sale of his product. Shyam suggests ‘maruthi’ car and shyam accordingly buys it from shyam. The car turns out to be unfit for touring purpose. Here the term that the ‘car should be suitable for touring purpose’ is a condition of the contract. It is so vital that its non-fulfillment defeats the very purpose for which ram purchases the car. Ram is therefore entitled to reject the car and have refund the price.

Definition of Warranty [Section 12(3)]

A ‘Warranty’ is a stipulation collateral  to the main purpose of the contract,the breach of which gives rise to claim for damage but not a right to reject goods and treat the contract as repudiated”[Sec.12(3).

Ex: Ramu buys a new maruti car from the showroom and the car is guaranteed against any manufacturing defect under normal usage for a period of one year from the date of original purchase and the event of any manufacturing defect there is a warranty for replacement of defective part if it cannot be properly repaired. If after six months ram finds that horn of the car is not working he cannot terminate the contract. The manufacturer can either get it repaired of replace it with a new horn. Ram gets a right for claim for damages,if any suffered by him but not the right of repudiation.

Difference between Condition and Warranty


Basis of Difference Condition Warranty
Importance Condition is essential to the main purpose of contract. Warranty is only collateral to the main purpose of contract
Remedy on Breach Breach of condition entitles buyer to treat the contract as repudiated by seller and thereby reject the goods and claim damages. Breach of warranty,as stated by section 59,entitles the buyer to demand only a suitable diminution or reduction in price and also claim damages.
Treatment by buyer The buyer has an option to treat a condition as a warranty and determine his remedies accordingly. The buyer has no option to treat a warranty as a condition.