Explain the Implied Conditions and Warranties in a Contract of Sale of Goods.

Implied conditions and warranties are deemed to be incorporated in every contract of sale of goods unless the terms of the contract show a contrary intention. Implied conditions. The following are the implied conditions.

As to title of goods : A contract of sale, there is an implied condition on the part of the seller that, he has a right to sell the goods and that, in the case of an agreement to sell, he will have a right to sell the goods at the time when the property is to pass to the buyer in future.

Sale by description : Where there is a contract of sale of goods by description, there is an implied condition that the goods shall correspond with description.

Sale by sample : In a sale by sample, there is an implied condition:— that the bulk shall correspond with the sample in quality.

  • That the buyer shall have a reasonable opportunity of comparing the bulk with the sample.
  • That the goods shall be free from any defect, rendering them un merchantable, which would not be apparent on reasonable examination of the sample.

Sale by description as well as sample : If the sale is by sample as well as by description, the goods must not only correspond with the sample but also with the description.

Fitness of the goods : Normally, there is no implied condition that the goods Shall be fit for particular purpose of the buyer. It is the duty of the buyer to see and satisfy himself whether the article will be suitable for the purpose for which he buys it. But there is implied condition on the part of the seller that the goods supplied shall be reasonably fit for the purpose for which the buyer wants them, provided the following conditions are fulfilled:

  • The buyer should make known to the seller the particular purpose for which goods are purchased.
  • The buyer should rely on the skill and judgement of the seller.
  • The goods must be of a description dealt in by the seller, whether he be a manufacturer or not.

Condition as to merchant ability : Where the goods are bought by description from a seller who deals in goods of that description there is an implied condition that goods shall be of merchantable quality [Section 16(2)].There are two requirements for this condition to apply:

  • Goods are bought by description.
  • The seller should be a dealer in goods of that description.

The word ‘merchantable quality’ would mean that the article is of such quality that a reasonable man, acting reasonably would accept it under the circumstances of the case, whether he buys it for his own use or to sell again.

Implied warranties:

Unless the circumstances of the contract are such as to show a different intention, the following are the implied warranties in every contract of sale.

Quiet possession of the Goods: In every contract of sale, there is an implied warranty that the buyer shall have and enjoy quiet possession of goods. If buyer’s possession is disturbed by anyone having a superior title than that of the seller, the buyer is entitled to hold the seller liable for breach of this warranty and he can claim damages from the seller.

Freedom from any Charge or Encumbrances : In a contract of sale there is an implied warranty that the goods shall be free from any charge or
encumbrance in favor of any third party not declared or known to the buyer before or at the time when the contract is made. If the goods are found to be subject to a charge in favor of a third party, the seller is liable to the buyer to pay damages.

Disclose dangerous Nature of Goods : If the goods are inherently dangerous or likely to be dangerous, and the buyer is ignorant of the danger, the seller must inform the buyer of the probable danger. If the seller fails to do so, the buyer is entitled to claim from him compensation for any injury suffered by him.

Usage of Trade: An implied warranty or condition as to quality or fitness for a particular purpose may be annexed by the usage of trade.

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