COLUMBIA LAW REVIEW.

VOL. I.

FEBRUARY, 1901.

No. 2.

CONDITIONS AND WARRANTIES IN THE SALE OF GOODS.

A DISTINGUISHED editor of Benjamin on Sales, at

the beginning of a learned note to the chapter on Conditions, remarks: "This is not the most satisfactory chapter in Mr. Benjamin's excellent work, partly from the fact that he had already discussed one class of conditional sales in Book II, Chapter 3; partly because many incidents of a sale, which are called 'conditions' in England, are in this country generally considered as implied warranties, and their more appropriate place for the American reader is in the following chapter on Warranty; and, not a little, because, to use his own words, of the 'very subtle and perplexing nature' of the subject itself, leading one to discuss here what might with propriety be considered elsewhere." At the close of this note, the distinguished editor informs his readers that the latter part of the chapter on conditions dealing with sales by "description, etc., will be considered under the next head of Implied Warranty, where the American courts generally place it."1

On the other hand, the latest English editors of Benjamin on Sales commend the author for his clear exposition of the distinction between Condition and Warranty in the chapter above referred to, while they criticise him for devoting the greater part of the chapter on Warranty to

1 Benjamin on Sales, Bennett's, 7th Ed., 594, 608.

those engagements of the seller, which he styles Implied Warranties, but which “are essentially conditions."1

It is not strange that Mr. Benjamin failed to adhere consistently to his distinction between conditions and warranties; nor is it surprising that different critics should ascribe his failure to different causes. In the first place, it should be borne in mind that his separation of implied conditions from implied warranties was something of a novelty. With the exception of Mr. Blackburn, every writer on the law of sales had dealt with both of these classes of engagements on the part of the seller, under the head of Warranty; and Mr. Blackburn, while treating many of them as conditions, did not discuss the topic of warranty at all. In the next place, it should be remembered, that not only was the language of judges upon this subject most confusing, but the judicial decisions were very discordant. Even as great a lawyer as Chief Justice Gibson had declared3: "On no subject have the decisions been so anomalous as on the warranty of chattels, and an attempt to arrive at a satisfactory conclusion about any principle supposed to be established by them would be hopeless, if not absurd." Mr. Benjamin attempted indeed to classify, distinguish and harmonize the decisions, but he did not undertake to state the law as it ought to be; he professed only to state it as he found it declared by the courts.

That the confusion and inconsistencies in his chapters on Condition and Warranty are chargeable rather to the deliverances of the courts than to him receives further confirmation from the original draft of the English Sale of Goods Act. This bill, drawn by Judge Chalmers (the draftsman of the Bills of Exchange Act), after consultation with Lord Herschell, Lord Bramwell and other distinguished lawyers, was an attempt "to reproduce as exactly as possible the statutory and common law rules relating to the sale of goods," A comparison of the sections of the bill under the heading of "Conditions and Warranties," Sections II to 18, inclusive, with Sections 10 to 15, inclusive,

1 Benjamin on Sales, Bennett's 7th Ed., 644, note (s).

2

See Long on Sales, and Story on Sales.

3 McFarland v. Newman, 9 Watts, 55 (1839).

'Chalmers' Sale of Goods, 1st Ed., Introduction.

of the Act, will show how badly confused by the cases. were the learned draftsman and his counsellors. After wrestling with the subject for five years, Parliament was able to bring a considerable degree of order out of confusion and to declare with authority what engagements on the part of the seller are conditions and what engagements are warranties.

DISTINCTION BETWEEN WARRANTY AND CONDITION.

The Sale of Goods Act defines warranty as "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."1

Condition is not specifically defined in the statute, but it is frequently contrasted with warranty as denoting every stipulation in a contract of sale, the breach of which may give rise to a right to treat the contract as repudiated. The statute also declares that "a stipulation may be a condition though called a warranty in a contract," and it applies the term "implied condition" to most of those engagements of the seller which judges and writers had been accustomed to call "implied warranties."

3

By confining the term warranty to the narrow but legitimate signification above set forth, the Sale of Goods Act has removed one of the most fruitful sources of confusion in this branch of the law. Prior to this enactment, a learned English writer, after warning his readers "that the word warranty is used in a great variety of senses," declared that "it would be a work of some research to enumerate the various senses in which the word warranty is used," and then proceeded to recount six distinct significations which were commonly attached to it. "Tis a consummation devoutly to be wished" that the word should be lim

'The Sale of Goods Act, 1893, Section 62. This provision applies only to England and Ireland. The statute declares that "As regards Scotland, a breach of warranty shall be deemed to be a failure to perform a material part of the contract."

2 Ibid, Section II.

3 Anson on Contracts (3d Ed.), 297.

ited in this country, as it has been limited in England, to a single signification; but it is a consummation probably attainable only by legislation. And yet it would seem to be the duty of every writer or judge dealing with this subject, to use the word in its narrow and legitimate sense and in that sense only.

THE FALLACY OF EQUIVOCATION.

An excellent example of the confusion resulting from the variant significations of warranty is afforded by two cases in Massachusetts. In the earlier case,1 the defendant asked the plaintiff if he wished to purchase some cloves, exhibiting at the same time a sample which plaintiff examined. Finding the sample to be of the best quality of Cayenne cloves, he gave an order to defendant for two casks, and, upon their delivery, paid the agreed price. Plaintiff did not open the casks nor inspect their contents at the time of delivery, but when he did open them some months later, discovering that the cloves did not correspond with the sample, but consisted of a mixture of Cayenne cloves and an inferior and distinct species, he offered to return them to defendant, who refused to take them back, whereupon the plaintiff sued to recover the difference in value between two casks of Cayenne cloves of the best quality and the cloves actually delivered. Upon the trial, the jury found that there was no fraud on the part of defendant, but that the cloves delivered were different in kind from those which composed the sample, and inferior in value; not because of decay or exposure, but because of the specific difference in the respective stocks from which the two kinds are produced; and returned a verdict for the plaintiff. The defendant's motion for a new trial having been argued with great ability by his counsel, afterwards Chief Justice Shaw, the case was carefully considered by the Supreme Judicial Court.

Chief Justice Parker, delivering the opinion, in which his associates concurred, stated the principal question to be: "Whether the evidence in the cause proved a contract to sell cloves of a different kind from those which were delivered." After referring to the contention of defendant's

counsel, "that no action upon a warranty can be maintained, unless the warranty is express; and that no other action can be maintained, unless there be a false affirmation respecting the quality of the article," and declaring that "if such were the law, it would very much embarrass the operations of trade, which are frequently carried on to a large amount by samples of the articles bought and sold "; the learned Judge proceeded to consider at length the nature of a sale by sample. His conclusion was, that the exhibition of a a sample by a seller "certainly means as much as this, 'The thing I offer to sell is of the same kind, and essentially of the same quality as the specimen I give you'"; and, in case the offer is accepted, the seller undertakes to supply an article which "is generically and specifically the same as the sample, and if a different thing is delivered, he does not perform his contract, and must pay the difference, or receive the thing back and rescind the bargain, if it is offered him."

In other words, when a man contracts to sell goods by sample, he engages to deliver goods which are generically and specifically like the sample. This engagement is not collateral to the sale contract, but is one of its essential terms. If the seller fails to perform it, he fails to perform the contract, and the buyer has the right to reject the tendered goods and treat the contract as repudiated. In the nomenclature of the Sale of Goods Act, such an engagement is a condition, not a warranty.

Had Chief Justice Parker, in the case under consideration, described the seller's engagement as a condition, and then proceeded to discuss the rights of the buyer upon the seller's refusal to take back the cloves, his opinion would have been beyond criticism. After the seller declined the buyer's offer to return the cloves, and the buyer continued to retain them, the latter was at liberty to treat the breach of condition as a breach of warranty, and bring the action he did bring for damages. In the language of the Sale of Goods Act," When a contract of sale is subject to any condition to be fulfilled by the seller, the buyer * * * may

elect to treat the breach of such condition as a breach of

warranty," and "may maintain an action against the seller Unfortunately,

for damages for the breach of warranty."

1 Sale of Goods Act, Sections 11 and 53.