The difference between warranty and condition

When we engaged in a sale of goods contract, there are two types of terms of contract which are ‘condition’ or ‘warranty’ [Section 12(1), Sale of Goods Contract].

So, what distinguish between a condition and warranty?? As stated in Section 12(2), condition is a stipulation which is essential to the main purpose of the contract, the breach of condition will leads to repudiation of a contract. In contrast, warranty is a stipulation which is collateral to the main purpose of the contract and its breach only leads to a claim for damages. [Section 12(3)]

Although the breach of condition will terminate the contract, the injured party can only claim for damages under some circumstances which are;

1) where the buyer waives the condition;
2) where the buyer elects to treat the breach of condition as a breach of warranty and claims damages only;
3) where the contract of sale is not severable and the buyer has accepted the goods or part thereof, the breach of any condition must be accepted as a breach of warranty unless otherwise provided in the contract; and
4) where the contract is for specific goods the property in which has passed to the buyer, the breach of any condition must be accepted as a breach of warranty unless otherwise provided in the contract.


There are certain guidelines to determine which term are condition or warranty, thus, if there is any breach of terms of contract and the matter is brought to the court, the decision to decide the matter argued is a condition or warranty is lie in the hand of the court.


(Source: Lee Mei Pheng, "General Principles of Malaysian Law" 5th Edition)