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CA Foundation · Business Laws · The Sale of Goods Act, 1930

Dinesh buys a machine from Esha Engineering under a contract that treats the delivery date as a condition. The machine is late, and Dinesh, who has been using it for two months, now wants to reject it. Separately, the machine also has a defective gauge that is only a warranty breach. What is the legal position?

Dinesh can only claim damages. Once a buyer has accepted the goods, a breach of condition must be treated as a breach of warranty, so he loses the right to reject. Using the machine for two months amounts to acceptance, and a warranty breach never gives a right of rejection.

  1. ADinesh may reject the machine for late delivery as it is a condition, regardless of acceptance
  2. BHaving accepted the goods, Dinesh must treat the breach of condition as a breach of warranty and can only claim damagesCorrect
  3. CDinesh may reject the machine only for the defective gauge
  4. DDinesh can reject it only if Esha Engineering consents

Explanation

Where a buyer accepts the goods, or part of them, the breach of a condition that he could have treated as repudiation must be treated as breach of warranty, unless the contract provides otherwise. Dinesh has used the machine for two months, so he is left to claim damages. Option A ignores acceptance. Option C is wrong because a warranty breach never permits rejection.

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