A term or a stipulation in a contract of sale with reference to goods may be either a condition or a warranty. A condition is a term which is essential to main purpose of the contract and hence is the foundation of the contract. The effect of a breach of condition is that it gives the right to the aggrieved party to treat the contract as void and also to claim damages, if any.
A warranty is a term which is collateral to the main purpose of the contract and hence is only a subsidiary promise. The breach of warranty does not give right to the aggrieved party to treat the contract as void but entitles him to claim damages only. In the absence of contract to the contrary, time of delivery of goods is treated as condition and for payment of price, as warranty.
In the following cases, the breach of a condition will be treated as breach of warranty only.
(i) When the buyer waives the condition or
(ii) When the buyer treats the breach of condition as a breach warranty and does not treat the contract as void or
(iii) Where the contract of sale is inseparable and the buyer has accepted the goods or part thereof or
(iv) Where the contract is for specific goods, the property in which has passed to the buyer.
Condition and warranties may be express or implied, When they are definitely written in the contract, they are called express conditions and warranties. They are called implied conditions and warranties, when they are not written in the contract and applied to the contract either by operation of law or by trade custom.