Stipulation

‘Stipulation’ signifies “a requirement or a particularized goods in an

agreement”.

In an agreement of offer of goods, stipulation alludes to portrayals made by

the purchaser and the vendor correspondingly as a piece of negotiation
between them before they go into a contract or an agreement.

If no portrayals or stipulations the principle of caveat emptor implies i.e.

‘let the buyer beware’.

Types of stipulations
 condition,
 warranty.
A stipulation is a condition which is important for the contract. A stipulation is
a warranty if it is collateral to the main intent of the contract.

Stipulation as to Time
As per Section 11, stipulations as to time of installment are not regarded to
be the pith of an agreement of an offer.

Case Law in Aron & Co. v Comptoir Wegmont

There was an offer of sale of goods c.i.f. Antwerp to be shipped in October.

The vendor was not to reject delivery even if there was any difference in the
type or value or grade specified. The goods couldn’t be transported till
November by virtue of strike at the port. It was held that the purchaser could
decline to take delivery of the goods.

Condition and Warranty

A stipulation in an agreement of offer could also be either a condition or a
warranty.

Definition of Condition According to Section 12 (2) of the Act,

“A condition is a stipulation important to the main intent for the agreement,
the breach of which offers ascend to one side to regard the agreement as
denied.

Definition of Warranty According to Section 12 (3) of the Act,

“A warranty is a stipulation collateral to the main intent for the agreement

the breach of which offers ascend to guarantee for harms yet not an option
to dismiss goods and treat the agreement as denied.” Section 12 (4) has
laid down that, “Whether a stipulation depends on an agreement of
offer is a condition or a warranty.

Case Law
In Baldry v Marshall,

A consulted a car seller for the acquisition of a car appropriate for touring
purposes. The vendor sold a car saying that it will deliver the needs of a
buyer. The car ended up being unfit for touring purposes. It was held that
the purchaser can restore the car and get back the cost as well as damages,
on the ground of breach of condition. In this case, the contract will not be
void if the purchaser demands for a good car.

Distinction Between Condition and Warranty

Condition Warranty

It is a stipulation that is essential

It is a stipulation that is auxiliary and
1 and basic to an agreement or a
subordinate to the warranty.
contract.

If the seller breaks the condition
the buyer can repudiate the
2
contract. He can also claim
damages in certain cases.
If the dealer breaks the warranty the
purchaser can abandon the agreement and
can either minimize the cost or claim for
compensation or both.

A breach of condition might be

considered as a breach of A breach of warranty can’t be considered or
3
guarantee or becomes a breach of neither it converts into a breach of warranty.
warranty.
When a condition should to be treated as
warranty
Section 13 of the Sale of Goods Act lays down the subsequent two
conditions

Waiver by buyer
Where an agreement of offer is subject to any condition to be fulfilled by the
vendor, the purchaser may:

1. waive the condition; or

2. elect to treat the breach of the condition as a breach of warranty.
Under section 3, the performance of a condition or a warranty is
excused in the accompanying cases:

Refusal to simply accept performance

The buyer is entitled to accomplishment of a deal contract.

To acknowledge the performance, the buyer makes the contentment of the

contract futile. In case if he waives the condition, later he cannot insist on its
fulfillment.

Hindrance of performance
According to Sec 53 of the Contract Act, when one party to the
agreement is obviated from performing his duty under the agreement by the
other party then the contract becomes voidable and such a party may claim
damages for any loss sustained due to the non-performance of the contract.

Disabled himself from performing

Where the completion of the agreement becomes unattainable because of
the conduct of one of the parties, then the other party can abandon the
contract without earning any liability.

Acceptance of goods by buyer

Where an agreement of offer is not severable, i.e., it is unified, and the
purchaser has acknowledged the goods or part thereof the breach of any
condition is to be treated as a breach of warranty. In this case, Sec. 42
provides that the purchaser is presumed to have accepted the goods.

Impossibility of performances
After the creation of the contract the performance becomes preposterous in
such case the performance will be excused on the following grounds as
mentioned below:

1. By negligence or default of any of the parties to contract.

2. By occurrence of the supervening occasion.
3. Inability to perform due to conditions outside his ability to control.
4. An act is passed by the state, for rendition the performance illicit.
5. In instance of two promises when one of the promises is not fulfilled
the promiser will have the chance to perform the other promises.
6. In case of two promises the promiser has the chance to elect any
one of them, if he unable to perform one of the promises he still has
the chance to perform other promises.

Express and Implied conditions and Warranties

The conditions and warranties are either:

 Express
 Implied
`Express’ conditions and warranties are those, which have been explicitly
agreed upon by the parties at the time of the agreement of offer.

`Implied’ conditions and warranties are those, which the law includes into
the contract unless the party’s stipulate hostile. Sec.62 says Implied
conditions and warranties might be call off or diverse by an express
agreement or by the advancement of dealings or by usage and custom.

The accompanying perception of Lord Justice Denning on account of:

Karsales (Harrow) Ltd. v Wallis is quite significant

In this connection. “It is presently settled that exception provisos of this sort,
regardless how generally they are communicated, possibly benefit the party
at the time of carrying out the contract”.

Implied Conditions
Sections 14 to 17 of the Act set out the implied conditions in an agreement
of offer.

Are as per the following:

1. Condition as to title [Sec. 14 (a)]

In each agreement of offer:

1. In instance of a deal, the seller has a right to sell the goods.

2. In the situation of a consent to sell, the seller has a right to sell the
goods during the time when the property is transferred.
Case Laws in Rowland v Divall

P purchased a car from A and used it for several months. later discovered
that A had no title to the car as it was a stolen one and P had to return the
car to the real owner. It was found that the buyer P can recover the full price
from the seller even though he has used the car for several months.

2. Sale by description (Sec. 15)

Where there is an agreement of an offer of goods by description, there is an
implied condition that the goods shall correspond with the description.

Meaning of ‘sale by description’

It may include the following situations: Where the buyer has never seen the
goods and buys them based on the description given by the seller.

Case Law in Verley v. Whipp,

The seller says that the machine he is selling is brand new. On delivery it
was found to be a used one. The buyer can reject the goods.
3. Sale by sample (Sec. 17)
An agreement of offer is a contract for sale by sample where there is a term
in the contract, express or implied, to that effect.

Case Law in James Drummond & Sons v E H van Ingen & Company.,

In this case the buyer can abandon the contract on discovering the defect in
the supplied of cloth by the seller.

4. Sale by sample as well as by description (Sec. 15)

The buyer can repudiate the contract on finding that the goods supplied
correspond with the sample but not match with the description. In case when
goods sold as per mentioned sample and description then both should match
corresponding item.

Case Law in Wallis v Pratt,

In this case, the buyer could recover loss, as there was a breach of condition
on contract for sale of seeds referred to as `Common English Sainfoin’ the
seeds supplied to the purchaser were of a different quality.

5. Condition as to quality or fitness [Sec. 16 (1)]

In an agreement of offer there is no implied warranty or condition as to the
quality or fitness for any precise motive of items supplied. The usual precept
is caveat emptor, i.e. consumer beware, the client ought to purchase the
items after fulfilling himself that they will serve his purpose. The first
exception to the rule of caveat emptor is that the place the buyer, expressly
or by way of implication, makes regarded to the seller the unique cause for
which the items are required, so as to exhibit that consumer depends on
seller’s ability or judgment and the items are of a description which it is in
the path of the seller’s commercial enterprise to grant (whether he is the
producer or producer or not), there is an implied situation that the goods
shall be moderately fit for such purpose.

Case law in Priest v Last,

The purchaser bought a hot water bottle from a chemist. It burst and harmed
her wife while using. It was found that the implied condition as to fitness was
broken and the seller was liable for loss.
6. Sale under patent or trade name
Sometimes a buyer may rely more on the trade name of an article than the
judgment of the seller. Provision of Sec. 16 (1) provides that in the case of a
contract for the sale of a specified article under its patent or other trade
name, there is no implied condition as to its fitness for any particular
purpose. Example A person buys ‘Aspro’ to get relief from severe headache,
if he does not get any relief, he cannot avoid the contract and the seller of
‘Aspro’ cannot be held liable.

7. Condition as to merchantability
Where goods are brought by description from a seller who deals in goods of
that description (whether he is the manufacturer or producer or not), there is
an implied condition that the goods shall be of merchantable quality.

[Sec.16 (2)]. Even goods sold under a patent or trademark must be of a

merchantable quality.

Case Law in Mareli v Fitch and Gibbons

A buyer bought a Stone’s Ginger Wine. While he was attempting to draw its
cork with a corkscrew and with due care, the bottle broke off and injured the
hand of the buyer. It was held that the bottle was not of merchantable
quality, so the seller was liable. Effect of buyer examining goods If the buyer
has examined the goods there shall be no implied condition with regard to
defects, which such inspection ought to have revealed. However, the implied
condition as to merchantability will continue to apply so far as latent defects
in the goods are concerned, since such defects cannot be discovered by
ordinary examination of the goods.

Implied Warranties
Subject to the contract to the contrary, following are the implied warranties
in an agreement of an offer of goods:

1. Warranty of quiet possession

Unless the circumstances are such as to show a different intention there is an
implied warranty that the buyer shall have and enjoy quiet possession of the
goods [Sec 14(b)].

2. Warranty of freedom from encumbrance

That the goods shall be free from any charge or encumbrance in favour of a
third party not declared of known to the buyer before or at the time when
the contract is made [Sec. 14 (c)].

3. Warranty as to quality or fitness by usage of trade an implied

warranty or condition
An implied warranty or condition as to quality or fitness for a particular
purpose may be annexed by the usage of trade [Sec. 16 (3)].

Case Law in Jones v Bowden

Where drugs were sold by auction and where it is a usage of trade to disclose
beforehand any sea-damage such disclosure must be made. In case no such
disclosure has been made and the goods are found to be defective, it will be
taken as a breach of warranty.

4. Warranty to disclose dangerous nature of goods

Where the goods are dangerous, and the seller knows that the buyer is
ignorant about the dangerous nature of the goods, the seller should warn the
buyer about the probable danger otherwise he will be liable for damages for
the injury caused to the buyer because of the dangerous quality of the
goods.