With reference to the provisions of the Sale of Goods Act, 1930 what is the major difference between condition and warranty? Examine the following cases and comment whether it is a ‘Breach of Condition' or 'Breach of Warranty' by quoting the relevant provisions of the Sale of Goods Act, 1930:
(i) Ashutosh purchased a second hand laptop from Sudhir for ` 10,000/-. After a month, Ashutosh came to know that Sudhir was not the true owner of the laptop. Actually Mahindra (a friend of Sudhir) was the true owner of the laptop, who unknowingly left his laptop at the Sudhir's residence. As a result Ashutosh's position became awkward. What would be course of action available to Ashutosh in this regard? (2 Marks)
(ii) Anita ordered to purchase an Italian couch from a prominent e-commerce platform. When the order was delivered, it was found that the couch was not Italian as narrated on the e-commerce platform. What would be course of action available to Anita in this regard? (2 Marks)

Question

Accepted Answer

Major difference between a Condition and Warranty under the Sale of Goods Act, 1930:
The following are the major differences between a ‘Condition’ and a ‘Warranty’ as per the provisions of the Sale of Goods Act, 1930.
Point of Differences | Condition | Warranty
Meaning | A condition is a stipulation essential to the main purpose of the contract. | A warranty is a stipulation collateral to the main purpose of the contract.
Right in case of breach | The aggrieved party can repudiate the contract or claim damages or both in the case of breach of condition. | The aggrieved party can claim only damages in case of breach of warranty.
Conversion of stipulations | A breach of condition may be treated as a breach of warranty. | A breach of warranty cannot be treated as a breach of condition.
(i) This is a case of ‘Breach of Warranty’ as to undisturbed possession.
As per Section 14(b) of the Sale of Goods Act, 1930, if the buyer having got possession of the goods, is later on disturbed in his possession, he is entitled to sue the seller for the breach of the warranty.
Therefore, Sudhir shall be held responsible for a breach and Ashutosh is entitled to sue Sudhir, the seller without title, for the recovery of the purchase price.
Alternative Answer (i)
This is a case of ‘Breach of Condition’ as to Title.
As per Section 14(a) of the Act, the condition implied is that the seller has the right to sell the goods (means he should be the real owner) at the time when the property is to pass.
If the seller’s title/ownership turns out to be defective, the buyer must return the goods to the true owner and recover the price from the seller.
In the given case, Sudhir has no right to sell as he was not the actual owner of laptop even though he sold the laptop to Ashutosh for consideration of ₹ 10,000/-. As the title of Sudhir turned out to be defective, Ashutosh should return the laptop to Mahendra and recover the full price paid from Sudhir.
Thus, Sudhir has breached the implied condition as to title.
(ii) This is a case of breach of condition of ‘Sale by Description’.
As per Section 15 of the Act, where there is a contract of sale of goods by description, there is an implied condition that the goods shall correspond with the description.
The buyer is not bound to accept and pay for the goods which are not in accordance with description.
Therefore, Anita is entitled to reject the Couch as it was not Italian as narrated on the e-commerce platform and ask for refund if already paid.

Question Scenario

Suggested Answer

1. Provisions of the Act / Applicable Law

2. Analysis & Application of Facts

3. Conclusion & Verdict

Ready to Practice More Law Cases?