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The term ‘warranty’ is defined in Sec. 12 (3) of the Sale of Goods Act as under:
“A warranty is a stipulation collateral to the main purpose of the contract, the breach of which gives rise to a claim for damages but not a right to reject the goods and treat the contract as repudiate”.
In other words, a warranty is a representation by the seller. It is not a very important factor in the sale of the goods. It is only collateral to the main purpose of the contract and if it proves to be untrue, the buyer cannot put an end to the contract. He can only claim damages from the seller.



Dave, a customer, went to Max, a horse dealer and told him that he wanted to buy a healthy horse. Max pointed at a particular horse and said it to be healthy. Moreover, Max informed Dave that the particular horse can also run at a speed of 40 km per hour. Dave bought that particular horse. Subsequently, Dave found the horse to be healthy, but it could only run at a speed of 30 km per hour. Dave wanted to reject the horse and to have the refund of the price. In this case, the representation made by the seller Max, is a warranty because it is only collateral to the main purpose, the main purpose being horse to be healthy. Thus, Dave cannot reject the horse on this ground.

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