Condition Sec. 12 (2) defines as ‘A condition’ is a stipulation essential to the main purpose of the contract, the breach of which gives the aggrieved party a right to repudiate the contract itself. In addition he can claim damages from the guilty party
Warranty Sec. 12(3) defines ‘A warranty is a stipulation collateral to the main purpose of the contract, the breach of which gives the aggrieved party a right to sue for damages only, and not to avoid the contract itself’.
Conditions are the very basis of contract of sale, so any breach of condition will make contract void, but in the case of warranties, aggrieved parties can claim only damages.
There is no hard and fast rule as to which stipulation in a contract is a condition or warranty. Sec 12(4) lays down whether a stipulation in a contract of sale is a condition or a warranty depends in each case on the construction of contract. A stipulation may be a condition though called a warranty in the contract. The court is not to be guided by the terminology of the parties but has to look to the intention of the parities by referring to the terms of the contract, its construction and the surrounding circumstances to judge whether a stipulation was a condition or a warranty. The best test is to see whether a stipulation is fatal to the aggrieved party, then such stipulation is a condition.
Example
(a) A man buys a particular horse which is warranted quiet to ride and drive. If the horse turns out to be vicious, the buyer’s only remedy is to claim damages. But if instead of buying a particular horse, a man asks a dealer to supply him with a quiet horse and the dealer supplies him with a vicious one, the stipulation is a condition, and the buyer can return the horse and can also claim damages for breach of contract ( Hartley vs Hyman).
Warranty Sec. 12(3) defines ‘A warranty is a stipulation collateral to the main purpose of the contract, the breach of which gives the aggrieved party a right to sue for damages only, and not to avoid the contract itself’.
Conditions are the very basis of contract of sale, so any breach of condition will make contract void, but in the case of warranties, aggrieved parties can claim only damages.
There is no hard and fast rule as to which stipulation in a contract is a condition or warranty. Sec 12(4) lays down whether a stipulation in a contract of sale is a condition or a warranty depends in each case on the construction of contract. A stipulation may be a condition though called a warranty in the contract. The court is not to be guided by the terminology of the parties but has to look to the intention of the parities by referring to the terms of the contract, its construction and the surrounding circumstances to judge whether a stipulation was a condition or a warranty. The best test is to see whether a stipulation is fatal to the aggrieved party, then such stipulation is a condition.
Example
(a) A man buys a particular horse which is warranted quiet to ride and drive. If the horse turns out to be vicious, the buyer’s only remedy is to claim damages. But if instead of buying a particular horse, a man asks a dealer to supply him with a quiet horse and the dealer supplies him with a vicious one, the stipulation is a condition, and the buyer can return the horse and can also claim damages for breach of contract ( Hartley vs Hyman).
Definition of Condition and Warranty in Business Law
![Definition of Condition and Warranty in Business Law]()
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