CONDITIONS AND WARRANTIES

Conditions and Warranties



Conditions and Warranties

A representation which is subsequently made part of the contract ceases to be a representation and becomes something more, viz., a promise that such a thing is or shall be. Anson, Contract, 15th ed., 1920,p. 182. The question then arises whether this representation, which has ceased to be a mere representation, and has become a term of the contract, is a condition or is a warranty.

A "warranty" is defined in the Sale of Goods Act (Ont. s. 2; U. K. s. 62) as meaning:

An agreement with reference to goods which are the subject of a contract of sale, but collateral to the main purpose of such 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. An earlier definition is that of Lord Abinger in Chanter v. Hopkins, 1838, 4M. & W. 399, at p. 404:

A warranty is an express or implied statement of something which the party undertakes shall be part of a contract; and, though part of the contract, yet collateral to the express object of it. A "condition" is not defined in the statute. A condition is a term which is "of the essence" of the contract or, in other words, which is " regarded by the parties as a vital term going to the root of the contract." (Steyn, 1997, 55-69)

A valuable note as to the terms "condition" and "warranty," with quotations from many sources, is contained in Chalmers, Sate of Goods, 7th ed. 1910, pp. 191 ff. In Wallis v. Pratt, in a judgment which was approved by the House of Lords, ([1911] A.C. 394), Fletcher Moulton L.J. said ([1910] 2 K.B. 1003, at p. 1012):

A party to a contract who has performed, or is ready and willing to perform, his obligations under that concract is enabled to the performance by the other contracting part of all the obligations which rest upon him. But from a very early period of our law it has been recognized that such obligations are not all of equal importance. There are some which go so directly to the substance of the contract or, in other words, are so essential to its very nature that their non-performance may fairly be consi-derel by the other party as a substantial failure to perform the contract at all (Horwitz, 2004, 74-81). On the other hand there are other obligations which, though they must be performed, are not so vital that a failure to perform them goes to the substance of the contract, Both classes are equally obligations under the contract, and the breach of any one of them entitles the other party to damages. But in the case of the former class he has the alternative of treating the contract as being completely broken by the non-performance and (if he takes the proper steps) he can refuse to perform any of the obligations resting upon himself and sue the other ...