Breach of Condition and Breach of Warranty Compared: The Remedies, the Implied Terms in Each Class, and How a Condition Becomes a Warranty

The division of terms into conditions and warranties is the Act's own contribution to the law of contract; the Contract Act has nothing like it. A condition is essential to the main purpose of the contract, and its breach lets the buyer reject the goods and treat the contract as repudiated. A warranty is collateral, and its breach gives damages only. The classification is not settled by the label the parties use, and a condition can descend into a warranty by the buyer's election or by his acceptance of the goods.

The two classes compared, and the question that decides which a term belongs to

1. The Definitions

Section 12, Sale of Goods Act, 1930

(2) A condition is a stipulation essential to the main purpose of the contract, the breach of which gives rise to a right to treat the contract as repudiated.

(3) A warranty is a stipulation collateral to the main purpose of the contract, the breach of which gives rise to a claim for damages but not to a right to reject the goods and treat the contract as repudiated.

(4) Whether a stipulation is a condition or a warranty depends in each case on the construction of the contract. A stipulation may be a condition, though called a warranty in the contract.

2. The Difference in Practice

	Condition	Warranty
Importance	Goes to the root of the contract	Subsidiary to its main purpose
Remedy	Reject the goods, treat the contract as repudiated, and claim damages	Damages only, or a reduction of the price under s. 59
Implied examples	Title, s. 14(a); description, s. 15; quality and fitness, s. 16; sample, s. 17	Quiet possession, s. 14(b); freedom from encumbrances, s. 14(c)
Can it change class?	Yes, it may be treated as a warranty under s. 13	No
After acceptance	Section 13(2) leaves only warranty remedies	Unchanged

📖 Poussard v. Spiers and Pond, (1876) 1 QBD 410

Facts: A singer was engaged for the whole run of an opera but fell ill and missed the opening night and the first few performances. The producers engaged a substitute for the run and refused to take her back when she recovered.

Held: The producers were entitled to treat the contract as at an end. Her failure to appear for the opening went to the root of the contract: the opening performances were the most important, and her absence deprived them of substantially the whole benefit of the engagement. The term was a condition.

Ratio: A term whose breach deprives the other party of substantially what he contracted for is a condition, and its breach permits repudiation. Compare Bettini v. Gye (1876), where missing rehearsals was a breach of warranty sounding only in damages.

3. When a Condition Becomes a Warranty

Waiver, s. 13(1). The buyer may give up the condition altogether.
Election, s. 13(1). He may choose to keep the goods and claim damages, treating the breach as a breach of warranty.
Acceptance, s. 13(2). Once he has accepted the goods under a contract that is not severable, he is compelled to treat the breach as one of warranty.
Excuse by law, s. 13(3). The section does not affect cases where performance of a condition is excused by impossibility or otherwise.
But the term remains a condition. As Wallis v. Pratt (1911) shows, a clause excluding warranties does not protect a seller who has broken a condition that the buyer had to treat as a warranty.

4. The Position Stated Shortly

A condition is essential to the main purpose; a warranty is collateral to it.
Breach of a condition allows rejection and repudiation; breach of a warranty gives damages or a price reduction.
The implied conditions are title, description, quality and fitness, and sample; the implied warranties are quiet possession and freedom from encumbrances.
Classification is a question of construction, and the parties' label is not decisive.
Poussard v. Spiers: missing the opening performances went to the root of the contract.
Section 13 lets a condition be treated as a warranty by waiver, election or acceptance.
A condition so treated remains a condition for the purpose of exclusion clauses.