Fundamentals of Business Laws and Business Communication · Sale of Goods Act, 1930

Price, Conditions and Warranties in the Sale of Goods Act

Updated 10 October 2026 · Fact-checked

Price is the money consideration for goods. It can be fixed by the contract, left to be fixed in an agreed manner, or set by a course of dealing; otherwise it is a reasonable price. A condition is essential, so its breach lets the buyer repudiate. A warranty is collateral; its breach gives damages or price reduction, not rejection.

Understand Price, Conditions and Warranties

A contract of sale needs a price, which is the money consideration for the sale of goods. The price may be fixed by the contract itself, left to be fixed in an agreed manner (for example by a third party's valuation), or determined by the course of dealing between the parties. If none of these applies, the buyer must pay a reasonable price. What is reasonable is a question of fact in each case.

The seller also makes promises about the goods. These promises are called stipulations and are of two kinds. A condition is a stipulation essential to the main purpose of the contract. A warranty is a stipulation collateral (secondary) to the main purpose.

The difference lies in the remedy. If a condition is broken, the buyer may repudiate (cancel) the contract and also claim damages. If a warranty is broken, the buyer cannot reject the goods. The buyer can only claim damages or reduce the price. Whether a term is a condition or a warranty depends on the meaning of the contract, not on the label the parties use.

Some terms are not written but are implied by law. Implied conditions include:

the seller's right to sell (Section 14(a))
sale by description: goods must match the description (Section 15)
fitness for purpose where the buyer relies on the seller's skill, and merchantable quality (Section 16)
sale by sample: bulk must match the sample (Section 17)

Implied warranties include:

quiet possession: the buyer will enjoy the goods undisturbed (Section 14(b))
freedom from encumbrances: the goods carry no undisclosed charge or claim in favour of a third party (Section 14(c))
disclosure of dangerous goods: where the goods are dangerous and the buyer is unaware of the danger, the seller must warn the buyer

One more implied term can be either kind. An implied condition or warranty as to quality or fitness may be annexed by the usage of trade (Section 16(3)). Whether it is a condition or a warranty depends on the usage and the contract.

A condition can sometimes be treated as a warranty (Section 13). This happens when the buyer chooses to waive the condition, or chooses to treat its breach as a breach of warranty. It also happens when the contract is not severable (it cannot be split into separate parts) and the buyer has accepted the goods or any part of them. In that case the breach can only be treated as a breach of warranty, so the buyer can only claim damages and cannot reject the goods, unless the contract has a term, express or implied, to the contrary.

Key formulas to remember

Price rule: Price = fixed by contract, OR by agreed method, OR by course of dealing; else a reasonable price; Reasonable price is a question of fact. Price must be money for it to be a sale.
Condition: Condition = essential stipulation; breach → repudiate + damages; The buyer may also choose to treat the breach as breach of warranty.
Warranty: Warranty = collateral stipulation; breach → damages or price reduction; The buyer cannot reject the goods merely for breach of warranty.
Sale by description (Section 15): Goods sold by description must correspond with the description; If sale is by sample as well as description, the goods must match both.
Condition treated as warranty: Waiver by buyer OR election to treat breach as warranty OR acceptance of the goods or any part of them (contract not severable) → damages only; Applies unless the contract has a term, express or implied, to the contrary.
Implied conditions: Right to sell (S.14(a)); description (S.15); fitness and merchantable quality (S.16); sample (S.17); Implied warranties: quiet possession (S.14(b)); freedom from encumbrances (S.14(c)); disclosure of dangerous goods. Separately, an implied condition or warranty as to quality or fitness may be annexed by usage of trade (S.16(3)).

How to solve Price, Conditions and Warranties questions

Use this method for any question on price, conditions and warranties.

1Read the facts and find the promise or term the buyer is complaining about.
2Ask whether the term is essential to the main purpose of the contract (condition) or only collateral (warranty).
3Check if the term is implied: description, sample, merchantable quality, fitness, or right to sell.
4For sale by description, compare the goods delivered with the words used to describe them.
5Decide the remedy: repudiation and damages for a condition, damages only for a warranty.
6Check whether the buyer waived the condition or accepted the goods, which turns a condition into a warranty.
7For price questions, see whether it was fixed, left to a method, or reasonable.
8Write the conclusion in one clear sentence.

Quickest way: Remedy-first elimination

When to use it: Use this for MCQs asking about the buyer's right after a defect or mismatch.

Look at the option wording: 'repudiate' signals condition, 'only damages' signals warranty.
Check for acceptance or waiver words in the facts; these push the answer to damages only.
If goods do not match the description, choose condition breach under Section 15, unless the buyer has accepted the goods (Section 13) or waived the condition.
If price is not mentioned, think 'reasonable price'.
Drop options that mix up condition and warranty remedies.

Common mistakes in Price, Conditions and Warranties

Treating any term as a condition because the contract uses the word 'condition'.
Students trust the label in the question.
Fix: Judge by how essential the term is to the main purpose of the contract, not the label.
Saying breach of warranty allows the buyer to reject the goods.
Both words sound like they give the same remedy.
Fix: Remember: warranty means damages only; condition means repudiation plus damages.
Forgetting that a condition can be treated as a warranty.
Students learn the two terms as fixed categories.
Fix: Check for waiver or acceptance of goods in the facts before choosing the remedy.
Ignoring sale by description when goods are visible to the buyer.
Students think description applies only when the buyer has not seen the goods.
Fix: Description can still apply if the buyer relied on it; check whether the goods match the words used.
Assuming price must always be stated in the contract.
Students overlook the reasonable price rule.
Fix: If price is not fixed or fixable by agreed method or dealing, the buyer pays a reasonable price.

Worked examples

Example 1

Meera agrees to buy a 'new 2024 model' scooter from Rohan's showroom. The scooter delivered is a 2021 model. What can Meera do?

Show the solution

Identify the term: 'new 2024 model' is part of the description of the goods.
Under the implied condition for sale by description (Section 15), the goods must correspond to the description.
The delivered scooter does not match, so a condition is broken.
The remedy for breach of condition is repudiation plus damages.

Answer: Meera can reject the scooter, cancel the contract and also claim damages.

Example 2

Anil buys a specific second-hand machine from Kiran, who warrants it will run for 5 years. Anil has accepted the machine and the property has passed. It fails after 2 years. Which remedy fits best?

Show the solution

The promise about running for 5 years is collateral to the main purpose of buying the machine, so it is a warranty.
Even if it were a condition, the contract is for that one machine and is not severable, and Anil has accepted the machine, so the breach would be treated as a breach of warranty.
A breach of warranty does not allow rejection of goods.
Anil's remedy is damages (or a price reduction).

Answer: Anil can claim damages only; he cannot repudiate the contract.

Exam tips

Questions often ask for the buyer's remedy: link condition to repudiation and warranty to damages.
Learn the list of implied conditions and implied warranties in two separate groups.
Watch for words like 'accepted' or 'waived' in the facts; they signal a condition treated as a warranty.
For Section 15, match the goods to the description first, then think about sample if mentioned.

Practice questions from Sale of Goods Act, 1930

Price, Conditions and Warranties in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Price, Conditions and Warranties: frequently asked questions

What is the difference between a condition and a warranty?

A condition is essential to the main purpose of the contract, so its breach lets the buyer repudiate and claim damages. A warranty is collateral, so its breach gives only a claim for damages or a price reduction.

What does Section 15 of the Sale of Goods Act say?

It deals with sale by description. It implies a condition that the goods will correspond with the description. If the sale is also by sample, the goods must match both.

When can a condition be treated as a warranty?

When the buyer waives the condition or chooses to treat the breach as a warranty breach. It also applies when the contract is not severable and the buyer has accepted the goods or any part of them. The buyer is then left with damages only, unless the contract has a contrary term.

What if the price is not fixed in the contract?

The price may be fixed by an agreed method or by the course of dealing. If neither applies, the buyer must pay a reasonable price.