Unit 2: Conditions and Warranties

• Stipulation as to time refers to the time of payment in a contract
• Stipulation is essential to the main purpose of the contract
• Condition


  A stipulation essential to the main purpose of the contract
• Warranty


  A stipulation collateral to the main purpose of the contract
• Differences between Condition and Warranty

  • Condition is essential to the main purpose
  • Warranty is collateral to the main purpose
  • Condition allows for repudiation or claim
  • Warranty allows for claim for damages only
• Waiver of conditions


  1. Voluntary waiver

  2. Compulsory waiver
• Express conditions


  • Agreed upon between the parties
  • Expressly provided in the contract
• Implied conditions


  • Presumed by law to be present in the contract
  • May be negated by an express agreement
• Types of Implied Conditions


  • Condition as to title
  • Condition as to description
  • Condition as to quality
  • Condition as to fitness
• Condition as to title is the first implied condition in a contract of sale
• In a sale by description, the goods must correspond with the description
• In a sale by sample, the bulk must correspond with the sample
• Condition as to quality

  The goods supplied must be fit for the purpose for which the buyer wants them
• Condition as to merchantability

  Goods should be of merchantable quality
• There is an implied condition that goods shall be wholesome in the case of eatables and provisions
• Implied warranty


  A warranty that the buyer shall have undisturbed possession of the goods
• The seller must disclose any dangerous nature of the goods
• Caveat emptor means "let the buyer beware"
• It is the duty of the buyer to examine the goods thoroughly before purchasing
• Exceptions to Caveat Emptor

  • Goods purchased under patent or brand name
  • Goods sold by description
  • Goods of merchantable quality
  • Sale by sample