Learning Outcome: After completion of this lesson, students will be able to - 1) identify and distinguish between conditions and warranties 2) learn about implied conditions and implied warranties available under Sale of Goods Act 3) determine when ownership of a property passes during a sale

1. Preeti Kana Sikder
Assistant Professor
Jahangirnagar University

3. CONDITIONS AND WARRANTIES
Suppose, a buyer wanted to buy a car with an engine of
1500 cc, preferably to be white.
If the car sold to him has an engine less than 1500 cc, it is a
breach of condition. If the car is of any other color, that
would be a breach of warranties.
Because the determining criteria of the wanted car was its
engine capacity.

4. CONDITIONS AND WARRANTIES
A condition is a stipulation essential to the main purpose of
the contract, the breach of which gives rise to a right to
treat the contract as repudiated.
A warranty is a stipulation collateral to the main purpose of
the contract, the breach of which gives rise to a right to
claim damages but not a right to repudiate the contract.

5. Conditions
It is an essential
stipulation.
In case of breach, the
aggrieved party can
terminate the contract.
Breach of condition can
be treated as breach of
warranties
Warranties
oIt is a collateral
stipulation.
oIn case of breach, the
aggrieved party can
claim for damages.
oBreach of warranties
cannot be treated as
breach of conditions.

6. (a)Voluntary waiver of a condition: when the seller breaches a
condition, the buyer can waive it as condition and claim
only. Such case is called voluntary waiver of a condition.
(b)Compulsory waiver of a condition: when the contract of sale is
indivisible and the buyer accepts the goods or a part thereof,
subsequently he comes to know about the breach of condition
the seller, he cannot repudiate the contract but can claim
damages. In this case, the law presumes a waiver and creates
estoppel against the buyer.

7. What is Estoppel?

8. A stipulation in a contract can be expressed or implied.
A stipulation is said to be expressed when it is written in the
contract.
Implied stipulations are presumed by law though they have not
been mentioned expressly in the contract
Section 14 to 17 of the Sale of Goods Act 1930 contain the
conditions and the warranties which are implied to a contract for
sale of goods.

10. 1) Condition as to ownership (Sec 14): in a contract of sale
of goods, there is an implied condition on the part of
seller that:
In case of sale, he has full ownership to sell the goods.
In case of agreement to sell, he will have a right to sell
goods at the time when the property is to pass.
Rowland vs. Divall (1923): Rowland bought a car
Divall. Four months later, it was found out that Divall did
have the ownership to sell the car and the real owner
the car from Rowland. Rowland was entitled to recover
full price from Divall even though he used the car for four
months.

11. 2. Condition as to description (Sec 15): in a contract
for sale of goods by description, there is an implied
condition that goods shall correspond to the given
description in terms of quality and characteristics of
the goods.
Andrews Bros vs. Singer & Co. (1934): the buyer
contracted for new cars. After delivery, he found one
reconditioned car. He was entitled to reject the car and
get a replacement by a new car.

12. 3. Condition as to sample (Sec 17): in a contract for sale of goods by sample,
there is an implied condition that:
(a) the bulk shall correspond to the sample in terms of quality.
(b) the buyer shall have reasonable opportunity of comparing the bulk with
the sample.
(c) the goods shall be free from any defect which renders them un-
merchantable which would not be apparent on reasonable examination of
the sample.
Lorymer vs. Smith: two parcels of wheat was purchased by sample. The
buyer inspected one parcel and another parcel was not available for
inspection before delivery. The buyer was entitled to rescind the contract on
the ground of not matching with the sample.

13. 4. Condition as to sample and description (sec 15): in
such case, the bulk will correspond with the both sample
and description.
Nichol vs Godts (1854): Nichol contracted to buy oil as to
description and warranted with sample. The delivered oil
was matched with sample but adulterated with another
oil which mismatched with the description. Buyer was
entitled to reject the oil.

14. 5. Condition as to fitness and quality (sec 16 (1) (2) (3):
(a) Condition as fitness: where the buyer informs the seller the
particular purpose of purchase of the goods, the buyer relies on
skill or judgment of seller, and the goods are of a description
the seller deals with in course of business, there is an implied
condition that the goods will be reasonably fit for the purpose.
Frost vs Aylesbury Dairy co. ltd.: the buyer bought milk for his
Milk was contaminated with typhoid germs and buyer’s wife died
from typhoid. The buyer was entitled for damages because the
knew this was for human consumption and the goods was un-fit
this purpose.

15. 5. Condition as to fitness and quality (sec 16 (1) (2) (3):
(b) Condition as merchantability quality: merchantable quality means the
goods are of such quality and in such condition that a reasonable man
reasonably would accept them under the circumstances of the case.
the goods was bought by description and the seller deals with the goods
this description, there is an implied condition that goods are of
quality.
Morelli vs. Fitch Gibbons (1928): buyer ordered a bottle of wine of a
brand. At the time of opening the cork, the bottle broke and caused injury.
The sale was held by description and the bottle was held un-
Buyer was entitled to damages from the seller.
(b) Usage of trade: An implied condition as to fitness or quality for a
purpose may be annexed to a contract for sale by usage of trade.

16. 1. Warranties of quite possession (sec 14 (b): there is an implied warranty that
the buyer shall have and enjoy quiet possession of the goods. Breach of this
occurs from the defective title of the seller. Therefore this may be regarded
extension of implied condition of ownership.
2. Warranty against charges (sec 14 (c): there is an implied warranty that the
goods shall be free from any charges and encumbrances.
3. Warranty of disclosing dangerous nature of goods: When goods of inherently
dangerous nature are sold, the seller shall warn the ignorant buyer of the
probable danger.
4. Warranty from usage of trade: An implied warranty as to fitness or quality for
a particular purpose may be annexed to a contract for sale by usage of trade.

18.  It is the duty of the buyer to be careful while purchasing goods
of his requirement and in absence of any enquiry from the buyer, the
seller is not bound to disclose every defect in the goods of which he
may be cognizant.
 The buyer must examine the goods thoroughly and must see
that the foods he buys are suitable for the purpose for which he
wants them. If the goods turn out to be defective or do not suit his
purpose, the buyer cannot hold the seller liable for the same as
there is no implied undertaking by the seller that he shall supply
such goods as suit the buyer’s purpose.

19.  If therefore, while making the purchases of goods,
the buyer depends on his own skill and makes a bad
choice, he must curse himself for his own fault in the
absence of misrepresentation or fraud or guarantee by
the seller.
 For instance, A purchased a horse from B for the
purpose of race, but he did not mention this.
Subsequently, the horse was found suitable for riding but
not for race. A cannot reject the horse or claim
compensation on the ground of caveat emptor rule.

20.  The seller makes a misrepresentation and buyer relies on it.
 The seller makes fraudulent statement and buyer relies on it.
 The seller conceals any defect of the goods which the buyer cannot
discovered by reasonable means.
 The goods were purchased on description but they do not
correspond with the description.
 When the goods were purchased on description and seller deals
with these goods in regular business, the goods are not
merchantable quality

21. The goods are bought on sample and the bulk does not
match with the sample. The buyer did not have
opportunity to check. There was any latent defect which
cannot be discovered by checking.
The goods were bought by description and sample and
they did not match with both description and sample.
Buyer informed his purpose and relied on seller’s skill but
the goods were found unfit for the purpose.
The seller deviates from any trade usage

23. The precise moment of transfer of ownership is
required to be determined:
Risk follows ownership. So where goods are lost or
damaged, the owner is entitled to damages.
The owner bears the risk. So if any damage is caused to 3rd
party, the owner is liable to pay damages.
In case of bankruptcy, the goods can be taken for
settlement of debts of the owner.
Whether the seller can sue for price depends on whether
the buyer has become the owner or not.

24. X has agreed to sell toY a
particular television, a contract
shall be concluded for the sale
of ascertained goods has taken
place
X offers to sell toY one bag of
grain out of the hundreds of
bags put in his/her warehouse,
a contract can be concluded
for the sale of unascertained
goods

25. For specific or ascertained goods: specific goods
means goods indentified and agreed at the time of
making the contract.
For unascertained goods: ownership will not pass
until the goods have been ascertained.
A contracted to buy 1 ton rice from B. B has 5 ton rice
at his warehouse. A will not become the owner until 1
ton rice has been separated for A from this 5 ton.

26. Ownership passes when the parties intend it to pass.
The parties may intend it to pass at once, or at
payment or at delivery of goods. Such intention can
be derived from:
the terms of contract,
the circumstances and
the conduct of the parties
When the intention of the parties cannot be
determined, Sections 20-24 of the Sale of Goods Act
determine when the ownership would pass.

27. When the goods are at deliverable state, the ownership
passes at the moment of completion of contract. The goods
are said to be at deliverable state when the buyer would
under the contract be bound to take delivery of them.
E.g. the buyer bought a bicycle from the shop and bicycle is
ready for delivery.

28. When the goods is to be put in deliverable state, i.e. the seller needs
to do something from his part to make the goods deliverable, the
ownership passes when goods become deliverable and the buyer has
been notified about this.
Philiph Head & Sons Ltd. Vs. Showfronts Ltd.: A sold a carpet to B
which was required to be placed at B’s house. A delivered the carpet
to B’s house but it was stolen before placement. It was held that the
ownership did not pass and the seller was liable to deliver another
carpet to buyer.

29. When the goods are at deliverable state but need to be
measured or weighted, ownership does not pass until same is
done and informed the buyer to take the delivery.
Zagury vs. Furnell: A sold B 289 bales of goat skin each
containing 5 dozens. A was required to measure and count the
bales. Before completion, the bales caught fire. It was held
that A remained the owner and carrier the risk.

30. When goods are sent to buyer for approval, the
ownership passes:
When buyer signifies his intention to keep the
goods, or
When buyer without signifying rejection, keeps the
goods till the period fixed for rejection, if no such
time fixed, for a reasonable period of time