Implied Condition Contract Law: Everything You Need to Know
Implied condition contract law presumes certain conditions of the contract exist and that both parties understand these conditions before signing the contract.3 min read
2. Conditions in the Contract of Sale of Goods
Implied condition contract law presumes certain conditions of the contract exist, even if it is not clearly stated, and that both parties understand these conditions exist before entering into the contract. The Sale of Goods Act 1930, Section 12, describes a condition as the basis for the contract and any breach may result in a voided contract. The consequences of the breach will depend on the nature of the contract and the promises given.
What Is a Condition?
A condition is a promise and the duties they generate and are the basis of what makes the contract work. A condition must meet one of the following to be satisfied:
- When the statute shows that it is a condition.
- If the law requires the court to confirm it is a condition.
- If a breach occurs and the consequences go to the root of the contract.
- When the parties agree that it is a condition and should be treated as such.
Under the Sale of Goods Act 1930, a condition and a warranty are seen as separate despite them both acting as a promise made by the seller. They are seen as separate because the nature of the promise is different.
An example of a condition being applied occurred in Baldry v. Marshall (1925). In this case, the buyer consulted a car dealer to purchase a car to be used for touring. The car dealer recommended a Bugatti car and stated it would meet the need the client requested. After the purchase, the buyer realized the Bugatti was not fit for touring. The court agreed that as a condition of purchase, the car should have met the implied ability of touring. The buyer was able to return the car and receive the full cost of the car back.
Conditions in the Contract of Sale of Goods
The Sale of Goods Act 1930 explains the conditions that relate to the ownership, quality, and nature of products being sold in Sections 14 through 17.
- Condition as to Title [Sec. 14 (a)]: Also known as Right To Sell. In every contract of sale, the first implied condition on the part of the seller is that they have the right to sell the goods. The seller is typically the owner of the goods or is an agent of the owner. In the case of selling a vehicle, ownership may be proven by possessing the vehicle's title.
- Sale By Description (Sec. 15.): The description of the product or goods being sold is an implied condition that the product or goods will match the description given. The description can include the quantity, characteristics, trademark, brand name, or what type of packing is used.
- Condition as to Fitness or Quality [Sec. 16(1)]: On a contract of sale the rule of law is "Caveat Emptor," or let the buyer beware, is the implied condition. This means that the seller will supply products or goods in a condition that allows them to be used as expected by the buyer. The buyer should make the seller aware of the intended use, and the buyer will rely on the seller's knowledge level to confirm the particular use is possible.
- Condition as to Merchantability [Sec. 16(2)]: There is an implied condition that the goods shall be of merchantable quality. Merchantable quality means the quality of the goods being sold are of reasonable and usable quality and are able to complete their intended function. The description of the goods must match a description that is generally known to the marketplace.
- Condition Implied by Custom [Sec. 16(3)]: The implied condition is that the quality of the goods will meet the requirements described by the seller. If information or condition are withheld, the buyer can reject the product.
- Condition in a Sale by Sample (Sec. 17): A contract of sale states that the products and goods delivered will match the sample used to confirm the sale. The implied conditions are that the bulk order will match the quality of the sample, that the buyer will be able to inspect the bulk order with the sample in a reasonable timeframe, and that no defects are present so the items are sellable.
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