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Unit 15: Conditions and Warranties

2. Warranty of freedom from encumbrances [Sec. 14 (c)]. In addition to the previous warranty, Notes
the buyer is entitled to a further warranty that the goods are not subject to any charge or
right in favour of a third party. If his possession is in any way disturbed by reason of the
existence of any charge or encumbrance on the goods in favour of any third party, he shall
have a right to claim damages for breach of this warranty.

3. Warranty as to quality or fitness by usage of trade [Sec. 16 (4)]. An implied warranty as to

quality or fitness for a particular purpose may be annexed by the usage of trade.
4. Warranty to disclose dangerous nature of goods. Where a person sells goods, knowing
that the goods are inherently dangerous or they are likely to be dangerous to the buyer and
that the buyer is ignorant of the danger, he must warn the buyer of the probable danger,
otherwise he will be liable in damages.

Example: A sold a ‘tin of disinfectant powder to C. He knew that it was likely to be
dangerous to C if it was opened without special care being taken. C opened the tin where upon
the disinfectant powder flew into her eyes, causing injury. Held, A was liable in damages to C, as

he should have warned C of the probable danger [Clarke v. Army & Navy Co-operative Society Ltd.,
(1963) 1 K B. 155].
Exclusion of implied conditions and warranties. Implied conditions and warranties in a contract
of sale may be negative or varied by (a) express agreement between the parties; or (b) the course
of dealing between them; or (c) the custom or usage of trade.

15.3 Caveat Emptor

This means ‘let the buyer beware’, i.e., in a contract of sale of goods the seller is under no duty to
reveal unflattering truths about the goods sold. Therefore, when a person buys some goods, he

must examine them thoroughly. If the goods turn out to be defective or do not suit his purpose
or if he depends upon his own skill or judgment and makes a bad selection, he cannot blame
anybody excepting himself.

Examples: (a) H bought oats from S a sample of which had been shown to H. H erroneously
thought that the oats were old. The oats were, however, new. Held, H could not avoid the contract
[Smith v. Hughes, (1871) L.R. 6 Q.B. 597).

(b) H sent to market 32 pigs to be sold by auction. The pigs were sold to W “with all faults
and errors of description”. H knew that the pigs were suffering from swine-fever, but he never
disclosed this to W. Held, there was no implied warranty by H and the sale was good and H
was not liable in damages [Ward v. Hobbs, (1878) 4 App. Cas 13]. The rule of caveat emptor is
enunciated in the opening words of Sec. 16 which runs thus: “Subject to the provisions of this Act
and of any other law for the time being in force, there is no implied warranty or condition as to the

quality or fitness for any particular purpose of goods supplied under a contract of sale ... “
Exceptions. The doctrine of caveat emptor has certain important exceptions. The case law on these
exceptions has already been discussed.
The exceptions are however briefly referred to:

1. Fitness for buyer’s purpose. Where the buyer, expressly or by implication, makes known to
the seller the particular purpose for which he requires the goods and relies on the seller’s
skill or judgment and the goods are of a description which it is in the course of the seller’s
business to supply, the seller must supply the goods which, shall be fit for the buyer’s

purpose [Sec. 16 (1)].

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