With reference to the provisions of the Sale of Goods Act, 1930 what is the major difference between condition and warranty? Examine the following…

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. 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. (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. (iii) This is a case of ‘Breach of Warranty’ as to Non-existence of Encumbrances. As per Section 14(c) of the Act, there is an implied warranty that the goods shall be free from any charge or encumbrance in favour of any third party not declared or known to the buyer before or at the time the contract is entered into. In the given case the car was already hypothecated in favour of a bank. However, Rishabh took another loan of 5Lakhs from his friend Sandeep on the basis of security of his car, without informing him about hypothecation of car. Therefore, Sandeep may file a suit against Rishabh for recovery of the money with interest. It may be noted that Sandeep can file a Civil Suit on a Competent Court to recover damages. The claim would be for loss suffered due to breach of Warranty and not the ownership of the Car.