Business Laws and Management · Elements of Law relating to Sale of Goods

Conditions and Warranties under the Sale of Goods Act

Updated 11 October 2026 · Fact-checked

A condition is a stipulation essential to the main purpose of the contract; its breach lets the buyer treat the contract as repudiated. A warranty is collateral; its breach gives only a claim for damages. To solve questions, classify the term, check if it is express or implied, then name the remedy.

Understand Conditions and Warranties

A contract of sale has many terms about the goods. The Act calls these stipulations. Section 12 says a stipulation may be a condition or a warranty.

A condition is essential to the main purpose of the contract. If the seller breaks it, the buyer may reject the goods and treat the contract as repudiated. A warranty is collateral (side) to the main purpose. If it is broken, the buyer cannot reject the goods only for that reason. The buyer can claim damages.

The label used in the contract does not decide the matter. Under Section 12(4), it depends on the construction of the contract. A stipulation may be a condition even if the contract calls it a warranty.

Some terms are not written but are implied by the Act. Sections 14 to 17 give these: title, description, sample, quality and fitness. Section 62 allows them to be negatived or varied by express agreement, course of dealing, or a binding usage.

A breach of condition can sometimes be treated as a breach of warranty. Section 13 says when. The buyer may waive the condition or choose to treat it as a warranty. Or the contract is not severable and the buyer has accepted the goods or part of them.

Key formulas to remember

Condition (Section 12(2)): Essential to main purpose → breach = right to repudiate; Buyer may reject goods and treat contract as repudiated.
Warranty (Section 12(3)): Collateral to main purpose → breach = damages only; No right to reject the goods on this ground alone.
Implied terms as to title (Section 14): Condition: right to sell. Warranties: quiet possession; freedom from undeclared encumbrance; Applies unless circumstances show a different intention. Remember: 1 condition, 2 warranties.
Sale by description (Section 15): Implied condition: goods correspond with description; If sale is by sample and description, matching the sample alone is not enough.
Fitness for purpose (Section 16(1)): Purpose made known + buyer relies on seller's skill + seller's usual line of business → goods reasonably fit; No implied condition if a specified article is sold under its patent or trade name.
Merchantable quality (Section 16(2)): Bought by description from a dealer in such goods → merchantable quality; No implied condition for defects an examination by the buyer ought to have revealed.
Sale by sample (Section 17(2)): Bulk matches sample; reasonable chance to compare; no hidden defect making goods unmerchantable; These are implied conditions.
Condition treated as warranty (Section 13): Buyer waives, or elects warranty; or contract not severable and goods accepted; Unless a contract term says otherwise in the non-severable case.
Remedy for breach of warranty (Section 59): Reduce or extinguish price, or sue for damages; Buyer may still sue if he suffered further damage.

How to solve Conditions and Warranties questions

Use this order for any scenario or MCQ on conditions and warranties.

1Read the facts and find the stipulation that was broken.
2Decide whether it is essential to the main purpose (condition) or collateral (warranty). Ignore the label the parties used.
3Check whether it is express or one of the implied terms in Sections 14 to 17.
4For implied quality or fitness terms, test each requirement: purpose made known, reliance, seller's business, trade name, examination by buyer.
5Check whether Section 13 applies: waiver, election, or non-severable contract with goods accepted.
6Check whether Section 62 excludes the term by agreement, dealing or usage.
7State the remedy: reject and repudiate for condition; price reduction or damages for warranty.
8Write the answer as rule, then application, then conclusion.

Quickest way: Remedy-first shortcut

When to use it: Use in the OMR paper when options differ mainly on the remedy.

Ask: can the buyer reject the goods? If yes, it is a condition. If only damages, a warranty.
Title: right to sell is a condition; quiet possession and no encumbrance are warranties.
Description, sample, merchantable quality and fitness are implied conditions.
If the buyer has accepted goods in a non-severable contract, the condition acts as a warranty.
Eliminate options that rely on the word used in the contract rather than its real nature.

Common mistakes in Conditions and Warranties

Deciding by the word used in the contract.
Students assume the label 'warranty' settles the remedy.
Fix: Apply Section 12(4): nature of the stipulation decides. A term called a warranty may be a condition.
Saying all three title terms are conditions.
The three are learned as one block.
Fix: Only the right to sell is a condition. Quiet possession and freedom from encumbrance are warranties.
Applying fitness for purpose when goods are bought under a trade name.
Students forget the proviso to Section 16(1).
Fix: For a specified article under its patent or trade name, there is no implied condition of fitness.
Giving the buyer a remedy for defects he could have seen.
The examination proviso to Section 16(2) is missed.
Fix: If the buyer examined the goods, there is no implied condition for defects the examination ought to have revealed.
Letting the buyer reject goods after breach of warranty.
Confusing warranty with condition.
Fix: For breach of warranty the buyer may reduce the price or sue for damages, not reject on that ground alone (Section 59).
Thinking implied terms can never be excluded.
The word 'implied' suggests they are fixed.
Fix: Section 62 lets express agreement, course of dealing or binding usage negative or vary them.

Worked examples

Example 1

Meera tells a shop owner, Rakesh, who sells water heaters, that she needs one for her hostel kitchen to heat water for 40 people, and asks him to choose a suitable one. Rakesh gives her a small 6-litre heater which cannot do this. What can Meera do?

Show the solution

Meera made her purpose known and relied on Rakesh's judgment.
Water heaters are in the course of Rakesh's business to supply.
So Section 16(1) gives an implied condition that the goods are reasonably fit for the purpose.
The heater is unfit, so the condition is breached.
Breach of condition lets Meera reject the goods and treat the contract as repudiated, unless Section 13 applies.

Answer: Meera may reject the heater and treat the contract as repudiated, as the implied condition of fitness was breached.

Example 2

Anil buys a lot of 500 cotton shirts from Sharma Textiles, a non-severable contract. He accepts and uses them. Later he finds the stitching below the agreed quality, which was a condition of the contract. May he reject all the shirts?

Show the solution

The stipulation as to quality is a condition.
The contract is not severable and Anil has accepted the goods.
Under Section 13(2), the breach can then be treated only as a breach of warranty.
This holds unless a contract term, express or implied, says otherwise. None is given.
Under Section 59, Anil may reduce the price or sue for damages.

Answer: Anil cannot reject the shirts. He may claim a price reduction or damages for breach of warranty.

Exam tips

In MCQs, first look for the remedy named in the options, as it reveals condition or warranty.
Memorise Section 14 as one condition and two warranties.
Watch for key words: trade name, examined the goods, relied on skill. They change the answer.
In written answers, quote the section number only for rules you remember well, and state the rule in plain words.
Check if goods were accepted in a non-severable contract before allowing rejection.

Practice questions from Elements of Law relating to Sale of Goods

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.

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. Its breach lets the buyer repudiate the contract. A warranty is collateral, and its breach gives only a claim for damages.

When can a condition be treated as a warranty?

When the buyer waives the condition or elects to treat the breach as a breach of warranty. Also when the contract is not severable and the buyer has accepted the goods or part of them, unless the contract says otherwise.

What are the implied conditions and warranties in a sale of goods?

They cover title (right to sell, quiet possession, freedom from encumbrance), description, sample, merchantable quality and fitness for purpose. They apply unless excluded under the Act.

Does caveat emptor apply under the Sale of Goods Act?

The general rule in Section 16 is that there is no implied condition or warranty as to quality or fitness, except as the Act provides. The cases in Section 16(1) to (3) and Sections 14, 15 and 17 are the exceptions that protect the buyer.