Implied conditions in a contract of sale

Meaning. A condition is a stipulation essential to the main purpose of a contract of sale; its breach allows the buyer to reject the goods. Implied conditions are those the law reads into every contract of sale of goods without the parties stating them, unless the circumstances show a different intention; the parties may exclude or waive them by express agreement. They qualify the old rule of caveat emptor ("let the buyer beware"), under which the buyer must examine the goods himself and bears the risk of a bad bargain.

The Sale of Goods Act, 1930 implies the following conditions.

1. Title (s. 14(a)). In a sale, the seller has the right to sell the goods; in an agreement to sell, he will have that right when the property is to pass. If his title fails and the buyer has to give the goods up to the true owner, the buyer can recover the price from the seller. Our example: Ravi buys a used scooter from Sunil; it later turns out to be stolen and the police return it to its owner. Ravi can recover what he paid from Sunil.

2. Description (s. 15). Where goods are sold by description, they must correspond with the description. The description may name the kind of goods or the features that identify them, and the condition goes to the root of the contract: goods that do not answer the description may be rejected even if the buyer could have inspected them. Our example: an order for "basmati rice" filled with ordinary long-grain rice may be rejected.

3. Sample (s. 17). In a sale by sample there are three implied conditions:

   1. the goods delivered must match the sample in quality; (b) the buyer must be given a fair chance to check the delivered goods against the sample; and (c) the goods must not carry a hidden (latent) defect, one that a reasonable inspection of the sample would not show, that makes them unmerchantable. Our example: tiles ordered from a sample look the same but crack within weeks because of a fault no one could see in the sample; the buyer may reject them.

4. Sample as well as description (s. 15). Where goods are sold by both, the bulk must correspond with the sample and with the description; matching one is not enough.

5. Fitness for purpose (s. 16(1)). Ordinarily there is no implied condition that the goods are fit for a particular purpose. Such a condition arises where (a) the buyer makes known to the seller, expressly or by implication, the particular purpose for which he needs the goods, (b) he relies on the seller's skill or judgment, and (c) the goods are of a description the seller deals in. Where the goods can serve only one purpose, the purpose need not be stated. There is no such condition where the buyer asks for goods by their patent or trade name, since he then relies on the name, not on the seller. Our example: a farmer asks a dealer for a pump that can lift water from a 60-foot bore and buys the one recommended; if it cannot, he may reject it.

6. Merchantability (s. 16(2)). Where goods are bought by description from a seller who deals in goods of that description, they must be of merchantable quality, that is, fit to be sold as goods of that description to a buyer of ordinary prudence. If the buyer has examined the goods, there is no implied condition as to defects that the examination ought to have revealed. Our example: a shop orders cartons of bulbs from a wholesaler and half arrive broken through poor packing; they are not merchantable.

7. Wholesomeness. For eatables and provisions there is, besides merchantability, an implied condition that the goods are wholesome, that is, fit for human consumption. Our example: packaged paneer that has gone sour before its date breaks this condition.

Effect of breach. A breach of an implied condition entitles the buyer to reject the goods and recover the price, with damages where he has suffered loss, unless he chooses, or is compelled, to treat it as a breach of warranty and claim damages only.