From the aforesaid discussion, you must have noted that the difference between the two terms viz., Condition and Warranty is not that of a degree and not that of kind. The crux of the decision shall lie on the fact as to whether a stipulation forms the basis of the contract or is only a collateral promise. Thus, where the buyer wouldn’t have purchased those goods but for that stipulation, it shall be construed as a condition.
On the other hand, if the buyer would have so purchased and the stipulation is only designed to provide an assurance as to the quality or suitability of the goods, it shall be a warranty. The distinction between the two stipulations is to be measured from the point of view that if the stipulation is such that its breach would make the rights of the aggrieved party nugatory, then such a stipulation is condition and where the stipulation is only auxiliary, it is a warranty. One may, therefore, say that whether a stipulation in a contract of sale is a condition or a warranty depends in each case on the construction of the contract as a whole. The court is not to be guided by the terminology used by the parties to the contract, but is to be guided by the intention of the parties which can be gathered from the terms of the contract and circumstances. Section 12 (4) endorses this view and provides that a stipulation may be a condition, though called a warranty in the contract.
The above-mentioned point may be clarified with the help of the following example:
‘A’, who desires to purchase a horse, goes to a horse dealer and asks the horse dealer to give him a quiet and non-vicious horse. The horse which the dealer supplies him turns out to be a hostile horse and on the very first ride throws him down resulting in broken limbs. In this case, the statement made by the buyer that he wants a quiet horse was a condition essential to the main purpose of the contract.
Therefore, A can reject the horse and get back the price. The buyer can also claim damage for the injuries suffered by him.
But, if ‘A’, himself selects a particular horse and then seeks the seller’s assurance as to its being quiet and non-vicious, the stipulation shall be a ‘warranty’ and the only remedy of the buyer shall be a claim for damages, he cannot return the horse and claim the price.
On the basis of the above discussion, the points of distinction between the two can be summarised as follows:
Parameters of Comparison Condition Warranty Meaning The condition can be described as a requirement necessary to be filled out in order to perform another action. It is a written assurance that is provided by the manufacturer to the person buying the product, stating that the product is in its true and best state with respect to the description of the product. Legal information Mentioned in Section 12(2) of the Indian Sale of Goods Act, 1930. Mentioned in Section 12(3) of the Indian Sale of Goods Act, 1930. Requirement A fundamental requirement for sale contract Additional requirement for sale contract Relationship Associated directly with the contract objective. Additional or subsidiary provision to the contract objective. Breach condition Contract termination. Damages can be claimed. Violation Condition violation also violates the warranty. Warranty violation does not affect the condition.
