warranty
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This article has been written by Rutuparna Sahu from KIIT School of Law, Odisha. This article talks about the Express and Implied Warranties under the Sale of Goods Act.

What is the warranty?

A Warranty is a condition present within a contract between parties, it comes into action the moment the condition is not satisfied or fulfilled by either of the parties. It is stipulated as collateral for the main deal. 

Section 13 of The Sale of Goods Act tells when a condition is to be treated as a warranty.

The conditions are as follows  :

  • In a contract of sale, if any matter is subjected to a condition that is to be satisfied by the seller, the buyer is entitled to waive the condition at any time if there is any breach of contract on the part of the seller. The buyer can treat the breach as a breach of warranty but cannot reject the acceptance of the goods by the way of repudiation. 
  • In a contract of sale, where the sale is without a severability factor and the buyer accepts the goods or its parts, the breach of any condition from the seller’s part will lead to a breach of warranty and the waiving of the warranty isn’t applicable on the grounds of repudiation by rejecting the goods after acceptance unless there is an implied or expressed condition stated before in the contract.
  • Nothing contained in this Section shall affect the fulfilment of a warranty or the condition of the contract by any Act that has already been excused by the law because of impossibility or otherwise.

In addition to this, any kind of breach of warranty leads to a claim for damages but not to be misinterpreted with repudiation under Section 12 (3) of the Sale of Goods Act

There are two main types of warranties, that are :

  • Express Warranty
  • Implies warranty

Express Warranty

An express warranty covers the part of contracts that is done expressly by ways of speaking or writing. In addition to that, this kind of warranty expressly comes with a guarantee of reliability and to meet a certain level of credibility of a particular product. If there is a problem pertaining to the product, the manufacturer needs to fix it anyhow without charging an additional cost. These are often used for the purpose of reference as it is a written form of the conditions concerning the contract.

The seller warrants the buyer in various ways

  • If any expressed statement of promise is made to the customer in a form of warranty in the context of the good’s quality or any other criteria by the seller, it needs to be true to the facts. 
  • In case of any description made against a particular good to the buyer has to be true to the facts regarding the good in the form of warranty.
  • Any sample or model showcased in order to promote the particular good has to be real to the facts as stated by the seller in a form of warranty.

A seller does not create the warranty just by a declaration. He may not choose to use any kind of explicit language to give a guarantee against the goods. However, it is difficult to acknowledge the seller’s intention in the context of selling the goods unless he expressly states about the credibility of the goods. A warranty is not merely created by means of a statement made by the seller against the good’s credibility or by the seller’s estimation regarding the product. 

Generally, during the course of a contract, the statements made by the parties are treated as statements of fact and as above stated unless there is an express statement, it is difficult to draw out any kind of opinion regarding the product whether to buy or not. 

Generally, products come with the terms and conditions applied against them from inception. So it gets easy for both manufacturers and buyers as well. 

Illustration 

For example, if a scooter dealer describes a scooter’s mileage to its customer of running about 55 km/lt and the scooter shows the exact mileage warranted by the dealer then there is no breach of express warranty but if it does not show the mileage as warranted by the dealer then it definitely is a breach of express warranty.  

Implied warranty

An implied warranty in the law of contract is solely based on presumption. Unlike express warranty, the guarantee is being served in ways of assurance by the ongoing circumstances involved in due course of the contract. A seller assures in detail about the good which the buyer is going to receive. These assurances take a form of warranty as there is hardly any other expression made for the required conditions to be fulfilled. These types of warranties are still considered even if it is not promised in any means of writing or orally. 

There are two types of implied warranty :

  • The implied warranty of merchantability.
  • The implied warranty of fitness for a particular purpose.

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Implied warranty of merchantability 

Warranty of merchantability is considered to be an implied warranty unless it is expressly stated somewhere with the tag of “to be merchantable”. Besides that, it needs to satisfy the basic criteria of genuinity i.e, the product needs to reasonably conform to the expectation of any ordinary buyer.

As the implied warranties are fully based on presumption, the buyer usually presumes the merchant’s warranty against the product’s credibility and inculcates a perception about the product as it has been showcased to the buyers. And talking about the merchant’s warranty, the merchant only guarantees the minimum credibility of the good. 

There are certain rights given to the merchant for the sale of its goods under Section 14:

  • In a contract of sale, the merchant has a right entitling him to sell the goods and in case of an agreement to sell, he is entitled to sell the goods when the goods are ready to be passed into the market. 
  • The processed goods come with an implied warranty assuring the buyer to enjoy it by possessing the particular good.
  • It’s the merchant’s job to make the goods free from any encumbrances which are in favour of a third party not known to the buyer before or at the time of contract made.

No household goods that are being sold to the consumers can be disclaimed with a merchantable warranty under the provision of Massachusetts Consumer Protection Law

Illustration 

As a mosquito repellent manufacturing company claims to kill dengue mosquito but B a buyer buys the product and was still found dengue positive which concludes that there was a breach of warranty of merchantability by the seller. 

Implied warranty of fitness for a particular purpose

In case of an implied warranty of fitness for a particular purpose, the buyer here is totally dependent on the seller’s work and skill to furnish the goods. The buyer basically tries to make things their way for a particular purpose. And this involves a warranty from the seller’s side that the goods produced will fit for a particular purpose. And when we talk about any particular product or good, it just sticks to the usage by the buyer and no way attached to the products’ business.

Certain provisions under the Sale of Goods Act about the implied conditions as to quality or fitness under Section 16 :

  • The buyer expressly or impliedly informs about the necessity of a product for a particular purpose to be fulfilled by the merchant and here the buyer totally relies upon the merchant’s skill or judgment for work. The goods are to be of a description as described in the course of the merchant’s business to supply. The good comes with an implied warranty of being fit for the purpose.
  • The goods required for the particular purpose need to be bought from a merchant which deals with the articles of the same description as required for the purpose with a condition that the goods need to be merchantable. If in case the good has gone through an examination and is checked properly by the merchant himself and no such fault could be found which could have been faced by the buyer in near future, the seller is not bound to give any implied warrant for the same.
  • Nothing contained in this Section is an express condition or warranty that negates the implied warranty or condition.

Illustration 

X a medicine manufacturing company dealing with a variety of medicines produced medicine for patients suffering from migraine. B, a migraine patient takes it and gets an adverse side effect by the consumption of the particular medicine which means that it isn’t fit for the group of people suffering from migraine and hence, it is concluded to be the breach of warranty of fitness for a particular purpose. 

Breach of warranty

Even if express and implied are two different types of warranties, they can be breached in a similar manner. So if there is any kind of breach against the buyer then the buyer has certain rights which are as follows :

  • The buyer has an explicit right to reject or revoke the contract of buying of goods if there is any breach of the contract against the goods. The buyer can anytime reject to accept the nonconforming goods and any nonconforming good that violates the conditions of the contract in any way, gives the right to the buyer to cancel the whole contract.
  • The buyer is entitled to recover any damages incurred by purchasing substitute goods, and by the difference between the market price for the substitute goods and the contract price. 
  • If a buyer accepts a nonconforming good but in result incurs damages then the buyer can claim and recover monetary compensation for the breach of warranty but the buyer has to give a notice in this context within a reasonable time. Having said that, the compensation for damages is being measured by the difference between the goods accepted by the buyer and the value that would have been if it was warranted. 
  • If there is a failure on part of the seller, the buyer has the same right to claim compensation for any incidental losses.

Cases breaching warranty 

  • In this case of Jacob and Youngs, Inc. Vs. Kent, the plaintiff ( Jacob and Youngs ) was the builder of Kent’s ( defender ) house made the piping system using Cohoes Rolling Mill company’s pipes instead of Reading Iron company’s pipes which breached the conditions of the contract. The defendant then asked the plaintiff to exchange the pipes with the Cohoes pipes and build it again to which the plaintiff disagreed and filed a suit against the defendant for compensation of the remaining balance that has not been satisfied because the defendant did not pay them for the building. First, the Court ruled in favour of Kent which got reversed on appeal and then the plaintiff was eligible for the rest of the payment and did not have to replace the pipes. 
  • In the Johnson and Johnson cancer case, a lady claimed that there was an asbestos chemical present in the Johnson and Johnson’s talcum powder which caused cancer and in addition to that, there were many complaints regarding ovarian cancer as well. The court in its verdict said that the lady was using the powder since her childhood so the powder wasn’t fully in fault but yes the company did not warn its customers about the adverse effects of using this powder so the lady was compensated with an amount of $29m by the Johnson and Johnson company. 

Conclusion 

From the above facts, we can derive that a warranty can be simplified as a guarantee. Which a seller has to prove to the buyer beyond all reasonable doubts because, in the end, it’s the buyer who is going to buy the goods of the manufacturer or merchants. So it’s important for the sellers to not to violate any of the conditions of the contract in which he is a party with the buyer. And buyers should not misuse the powers given to him by giving it a form of repudiation. 

References 


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