All of us who have bought electronic items or similar devices, ask about the warranty periods. In some cases, you may have seen that even the warranty is sold separately as a commodity. But does the law say about it?
While making a contract of sale of goods the buyer and seller enters into some terms and facts of the contract, which are known as stipulation.
The stipulation may be of two types:-
- Condition
- Warranty
Stipulation in Contract of Sale under Section 12(1) with reference to goods may be a condition or a warranty.
Warranty and condition in contract law refer to specific stipulations set in a contract of sale. A contract is an agreement that takes place between two parties to complete a mutual transaction. Warranty and condition include the specific features of those terms.
Drafting a legal contract requires clear and specific conditions. The conditions are the actions or steps that one or both parties will do to fulfill their side of the contract. The conditions are a requirement based on the contract agreement. There are two types of conditions present in a typical contract:
- Expressed Condition: These are conditions that are clearly defined and agreed to.
- Implied Condition: These are conditions that are not verbally discussed but are expected to be a part of the contract. Implied conditions might include the title of goods sold, the quality of the goods, condition of completeness, and a sale by description.
A warranty is a guarantee as to the quality of the goods or services sold that are included in the contract. A warranty can also be expressed or implied. Warranties back up statements about sold products or goods. If a warranty claim proves to be false, solutions include:
- A refund
- A full void of the contract
Warranties are also available either:
- With a time limit
- For the entire life of the goods
However, the time requirements should be included in the contract.
It is not always clear as which contract terms are conditions and which are warranties. Statutes can determine which terms are considered to be a contract condition or a warranty. Many legal jurisdictions follow The Sale of Goods Act of 1979. This legal act stipulates that:
- Characteristics of goods sold, including descriptions, quality, and fitness, are often included as conditions.
- Characteristics such as the enjoyment of goods and a lack of encumbrances are usually considered to be warranties.
Condition treated as warranty
There are certain situations when conditions to be treated as a warranty. As a consequence, the buyer loses his right to reject the goods and can only claim damages for breach of condition.
According to section 13 of Sale of Goods Act there three situations covered under two types of waiver for the purpose of treating conditions as warranty:
- Voluntary waiver
Waiver by buyer- Section 13 subsection 1 states that when there is any condition precedent that has to be fulfilled by seller, the buyer has a right to waive that condition precedent or treat that condition precedent as a breach of warranty because the conditions are for the benefit of buyer he has an option to waive it. Technically the buyer is waiving the right to repudiate the contract not just the waiver of a condition precedent.
Involuntary waiver
- Non-severability of contract- According to subsection (2) section 13, when the buyer has accepted the goods or a part of goods which are not severable, the breach of condition on the part of seller will be considered as a breach of warranty, unless, any contrary term of contract is present, and buyer can no longer repudiate the contract, but he can claim damages form the seller.
- Excused by law due to impossibility- When any contract of sale is excused under the law due to the impossibility of act, conditions can still be treated as a warranty under section 13 sub(3). Impossible acts are defined under section 56 of the Indian Contract Act. Section 56 mentions that any agreement to do an impossible act is void.
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