Consider the following cases one by one. Analyse their important evidences or incidents in the form of points briefly & suggest the decisions that should be made according to the law.
(A). The buyer contracted with the defendant (seller) to buy 50 tons of vegetables grown specifically from the defendant’s land. The defendant’s crop was destroyed by hailstorm, rendering the defendant’s performance under the contract impossible. The buyer brought suit for damages in the court. Whether the decision should be ruled in favor of the defendant or buyer.
(B). Company ABC sells merchandise on credit to Company XYZ on credit terms of n/60. The company XYZ has not made the payment to company ABC even after a month of date of the contract. A fresh legal trainee suggests company ABC to file suit against the company XYZ. What do you think should be the court's decision if company ABC files for the suit?
Answers
Answer:
The Sale of Goods Act 1930 (hereinafter the Act) contains various provisions regarding the sale of goods. One such provision is of conditions and warranties. In Section 12 of the Act the meaning of conditions and warranties are given as under-
Explanation: stipulation in a contract of sale with reference to goods which are the subject thereof may be a condition or a warranty.
(2) A condition is a stipulation essential to the main purpose of the contract, the breach of which gives rise to a right to treat the contract as repudiated.
(3) A warranty is a stipulation collateral to the main purpose of the contract, the breach of which gives rise to a claim for damages but not to a right to reject the goods and treat the contract as repudiated.
(4) Whether a stipulation in a contract of sale is a condition or a warranty depends in each case on the construction of the contract. A stipulation may be a condition, though called a warranty in the contract.
But our concern here is with 'Implied Conditions and Warranties'. If a stipulation forms the very basis of the contract, or, as stated in S.12(2) is essential to the main purpose of the contract, it is called a condition. On the other hand, if the stipulation is not essential to the main purpose of the contract, it is called warranty S. 12(3).
Parties may expressly provide any conditions or warranties in their contract. For e.g. for a sale of red saree, to be worn by a woman at a function on a particular day, it is express condition that it should be red saree for a particular day and should reach on time. But is there any other condition? Yes, there can be other conditions also that are not exclusively said by parties but are impliedly understood. In the said illustration, the implied condition can be of a perfect saree, not to be torn, matching with selected piece etc. Let's have a deep look into this provision