Monday, April 19, 2010

Condition And Warranty

Condition
A condition is a term (oral or written) which goes directly 'to the root of the contract', or is so essential to its very nature that if it is broken the innocent party can treat the contract as discharged. That party will not therefore be bound to do anything further under that contract.

Warranty
A warranty is the term of the contract which is collateral or subsidiary to the main purpose of the contract. It is therefore not so vital as to affect a discharge of the contract. A breach of warranty only entitles the innocent party to an action for damages; he cannot treat the contract as discharged.
Both conditions and warranties are terms in a contract and it is for the court to decide in each contract whether, having regard to the intentions of the parties, a term is a condition or a warranty. The importance lies in the remedy in the event of breach.

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