How to deal with a breach of warranty? [2020]

Author- Seep Gupta
College- Institute of Law, Jiwaji University

Introduction– how to deal with a breach of warranty:

Often when people go out in the market to buy essential goods and commodities, they have this tendency to check the appropriate price, M.R.P. (Maximum Retail Price), best before date, its guarantee, and warranty period. Warranty is an essential part of any product. It tells us about product durability. It also depicts how long a specific product can be used. It is the responsibility of a consumer to carefully scrutinize any product before paying a hefty amount for it. The producer also owes a duty towards the customer not to misrepresent any characteristics of the product. In this article, we will deal with what steps we should take in case of a breach of warranty.

In terms of the contract, it ensures mutual obligations between the parties which are the parties to the contract. A breach of warranty is the breach of guarantee that a product ensures.

Definition of Warranty under Sales of Goods Act, 1930

Warranty is defined in Section 12(3) of Sales of Goods Act, 1930. Warranty is one of the elements of breach of contract which will not lead to the expiration or repudiation of contract but it gives the injured or aggrieved party a right to claim for damages or monetary compensation from the seller of the product.

Failure of any stipulation which is attached to the main contract, failing to fulfil that will not terminate the contract. However, there are some exceptions. A buyer cannot avoid contract merely on this basis.[1]

What is a Breach of Warranty?

Product liability is the liability of the vendor or manufacturer of a product to compensate for the injury of the consumer in case of a defective product that is out there for sale. When an individual is harmed by any flawed or defect product, it has full rights to sue the vendor or manufacturer of the product. There is a paradigm shift in one of the crucial principle i.e. ‘Caveat Emptor’ (Let the buyers beware) of consumer protection. Now, it is no more responsibility of the buyer to check any defects in the products but there lies the provision of strict liability on the vendor.[2]

Breach of Warranty in the context of the Indian Contract Act, 1872

According to the provisions mentioned under the Indian Contract Act 1872, a breach of the warranty in a contract happens when the seller’s guarantee about a specific product and his promises regarding the product and its liability is false. It is a special type of contract which is different from breach of contract. It is given in Section 59 of the Sales of Goods Act, 1930.

A contract is an agreement which is valuable and legal in the eyes of law. A warrant is not a contract but merely an element of the contract. A warranty is nothing but just a guarantee given to the buyer by the seller that product will meet a certain demand and will fulfil specific obligations.

There are three types of warranty which are mentioned below:-

  1. First one is an express warranty which is either given orally or in an expressed manner under the terms and conditions of the contract.
  2. An implied warranty is neither orally nor expressively mentioned in the contract. It is in an implied manner. It is the responsibility of the buyer to imply it.
  3. Representations are technically different from warranties. It is a statement of fact made by a seller that a product possesses a certain quality or characteristic.[3]

Both expressed and implied warranty is part of the breach of contract. An implied warranty is slightly difficult to prove as there is not any expressed provision mentioned by the seller in the written form of the contract. Expressed warranty can be contemplated quite easily because it is mentioned in the expressed and overt manner.

Remedies for Breach of Warranty under the Indian Contract Act, 1872

It’s important to have knowledge on How to deal with a breach of warranty-

  • The buyer has the right to reject the goods after their delivery if he feels that there has been a breach of warranty by seller and if the product fails to meet the prescribed specific conditions.
  • The buyer accepts the goods but receives monetary compensation on the face of value by the seller of the product.
  • The buyer has the right to replace the original or defected goods and can receive a substitute for it. Later, the buyer can demand compensation for the damages.

Anticipatory breach:

An anticipatory breach is a type of breach that can be anticipated beforehand. It depends on the seller’s intention as well. For anticipatory breach, you do not need to wait for the actual breach.

Illustration

If A has ordered a certain amount of material from B and if B does not have any intention or is reluctant to supply A the desired amount of material that is mentioned in the contract, then B will be liable for anticipatory breach.

The seller needs to ponder over or imply that whether the seller is intentionally delaying the delivery or there are some rational reasons behind delaying the delivery.

War prevalent conditions in a country before the delivery of any product will not amount to an anticipatory breach. This is a sane and valid excuse.

Force Majeure which is an inevitable and unforeseeable condition is a valid excuse for delaying the contract.[4]

Remedies for Breach of warranty given under the Sales of Goods Act, 1930

Remedies for breach of warranty given under the Sales of Goods Act, 1930 are mentioned below:-

  • According to Section 59 of the Sales of Goods Act 1930, in case of breach of warranty, the buyer does not have any right to reject the goods but rather he can sue the seller for diminishing the quality of goods.
  • The seller according to the provisions mentioned in this act also has the right to sue the seller in case of diminution or extinction of the price of goods.
  • In certain circumstances, even the breach of the condition can be treated as a breach of warranty. These conditions are mentioned under Section 12(3) of the Sales of Goods Act, 1930. Even in these conditions, the buyer does not have any right to reject goods.
  • According to Section 57 or Section 61 of the act, the buyer has the right to recover the purchasing amount along with interests in case of breach of warranty.
  • In the case where the warranty has been given by the seller on account of the quality of the product, the seller has the right to receive compensation based on the worth of goods at the time of delivery and the actual worth according to the time of delivery.[5]

Conclusion

In the end, I would like to conclude this article by making the following remarks:-

  • Breach of Warranty is not a breach of contract. A breach of contract occurs when someone does not fulfill the promises given in that. A breach of warranty is just a subpart of it.
  • It does not render the contract extinction rather it guarantees the right to seek monetary compensation from the seller of the product.
  • It is a special type of contract.
  • In exceptional cases, even the breach of conditions of contract can be put under breach of warranty.

References:

[1] Purti, ‘When is Condition treated as Warranty?’ http://www.legalserviceindia.com/legal/article-2168-when-is-condition-treated-as-warranty-.html accessed 05 October 2020

[2] ‘Breach of Warranty’ https://legal-dictionary.thefreedictionary.com/Breach+of+Warranty#:~:text=Breach%20of%20warranty%20refers%20to,must%20stand%20behind%20these%20assertions accessed 03 October 2020

[3] Fraser Sherman, ‘Difference between Breach of Contract & Breach of Warranty’ (2020) https://smallbusiness.chron.com/difference-between-breach-contract-breach-warranty-30452.html accessed 05 October 2020

[4] ibid

[5] Mayank, ‘Damages to Buyer in case of Breach of Contract by Seller’ (2018) https://www.latestlaws.com/articles/damages-to-buyer-in-case-of-breach-of-contract-by-seller-by-mayank/ accessed 05 October 2020

If you have any query about this post, feel free to Ask Us

You cannot copy content of this page