Condition, Contractual

Something that must be fulfilled for obligations under a contract to be effective. Conditions can be written as conditions precedent (preconditions) in which case the obligation is not triggered until the condition is fulfilled; or as conditions subsequent, in which case the obligation may be terminated or suspended if the condition is not fulfilled or if it ceases to be fulfilled.

In English common law, as well as the laws of Ireland, Australia, New Zealand, and other countries following the English legal tradition, a contractual condition is something different from a warranty: (a) a condition goes fundamentally to the purpose and intent of the  agreement, i.e., the ability of the delivering party to actually deliver the goods or services promised and breach of a condition gives rights to both damages and to the legal remedy known as rescission; (b) a warranty is an agreement with reference to the goods or services, which are the subject of the contract of sale, but collateral to the main purpose of such contract and breach of a warranty gives rise to a claim for damages, but not a right to rescission. The breach of a condition allows the aggrieved party the right to terminate the contract and seek damages, while the breach of a warranty allows the aggrieved party only to claim damages.

In general terms, under the Sale of Goods Act 1979, the description of goods and their quality and fitness for purpose are usually regarded as ‘conditions.’ The buyer’s subsequent ability to ‘enjoy’ or use the goods tends to be seen as a warranty, i.e., the warranty of ‘quiet enjoyment’ or that the goods are free from undisclosed claims. The details turn very much on case law and the language of the contract.

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