Warranties are a key feature of commercial contracts, providing enforceable assurances about the quality, performance, or characteristics of goods and services. They allocate risk and shape remedies for non-performance or defects. Under Indian law, warranties may be express or implied, making it important to identify which must be expressly set out or excluded, which cannot be excluded, and how liability can be limited or expanded. This article examines these categories, emphasising how careful drafting can reduce disputes, clarify relationships, and build long-term trust.
Before exploring warranties, they should be distinguished from related concepts. Section 12(2) of the Sale of Goods Act, 1930 (“SOGA”) defines a condition as a stipulation essential to the contract. Breach of a condition allows repudiation. A warranty, in contrast, is collateral to the main purpose, and its breach allows damages.
The duty of disclosure of the seller is classified into representations and warranties. A representation is a pre-contractual statement inducing a party to contract but not part of its terms. If false and relied upon, it may amount to misrepresentation under the Indian Contract Act, 1872 (“ICA”) and render the contract voidable. A warranty, by contrast, is a contractual stipulation, breach of which does not vitiate the contract but gives rise to damages. [All India General Insurance Co v. S P Maheswari, AIR 1960 Mad 484]
In commercial drafting, classifying obligations as representation, condition or warranty is essential. Clear classification mitigates risk. For instance, a breach of warranty may be treated as a breach of condition, entitling the counterparty to terminate the contract. Similarly, critical versus non-critical representations should also be distinguished, so that appropriate remedies apply (i.e. avoidance of contract for critical misrepresentations and damages for non-critical ones). Section 14 of the SOGA implies a warranty of title, meaning the seller promises they have the right to sell, and the buyer will enjoy quiet possession. Although described as a warranty, courts treat the absence of title as affecting the root of the contract, effectively making it a condition. When drafting, classifying this as a representation (and warranty), because it is critical in nature, can allow for the contract to be repudiated if the statement is found to be false.
Express warranties assure quality or performance. Section 2(20) of the Consumer Protection Act, 2019 (“CPA”) defines them as, “any material statement, affirmation of fact, promise or description relating to a product or service warranting that it conforms to such material statement, affirmation, promise or description and includes any sample or model of a product warranting that the whole of such product conforms to such sample or model.”
In practice, this means that any assurance, whether in the form of a factual statement, contractual promise, or sample or model shown during negotiations, can constitute an express warranty, if intended to be relied upon by the buyer.
Express warranties are enforceable under the ICA, the CPA and the SOGA. Providing misleading or unfulfillable warranties constitutes an unfair trade practice under Section 2(47) of the CPA, while breach of warranty allows damages under Section 73 of the ICA. Product liability provisions under Sections 82 to 87 of the CPA reinforce their importance: manufacturers, sellers, and service providers may be held strictly liable if a product fails to conform to its express warranty, even without negligence or fraud.
From a drafting perspective, express warranties should be precise, measurable, and confined to contractual assurances. Vague or aspirational statements create unintended liabilities. Marketing materials must align with contractual warranties, as the CPA allows consumers to hold sellers liable where the manufacturer is unidentifiable.
Extrapolating these principles beyond the CPA and SOGA, warranties and liabilities in contracts for sale and purchase (of shares, businesses, immoveable or moveable property, intellectual property, or B2B contracts) need to be carefully drafted. From a seller’s perspective, carve outs excluding reliance on information memoranda, brochures, advertisements, or oral assurances may be necessary. Contracts should specify remedies, notice requirements, cure periods and limitations on liability so parties know who bears which risk.
Implied warranties arise by operation of law to protect buyers, where no explicit assurance is provided. Section 14 of the SOGA recognises implied warranties of good title, quiet possession, and freedom from encumbrances. Sections 15 to 17 introduce implied conditions of fitness, merchantable quality, sale by description, and sale by sample. Although courts have occasionally blurred the line between conditions and warranties, SOGA limits caveat emptor (“let the buyer beware”), ensuring that buyers are not left without remedies for latent defects or non-conformity.
While implied warranties enhance buyer protection and increase confidence in transactions, they also expose sellers to risk, unless expressly excluded. Section 62 of the SOGA allows parties to exclude or vary implied obligations through agreement, course of dealings, or usage. Commercial contracts often include disclaimers such as: “Except as expressly provided in this Agreement, no other warranties, whether statutory, implied or otherwise, shall apply.”
Exclusions are not absolute. While ICA allows modifications to warranties, statutory protections under the CPA cannot be completely excluded. Section 23 of the ICA renders a contract void if it is contrary to law or public policy, and courts have held that rights created for public benefit cannot be waived. [Simplex Concrete Piles (India) Limited v. Union of India, ILR (2010) II Delhi 699]
The Supreme Court has clarified that contractual exclusions or limitations of liability are unenforceable in cases of fundamental breach. [Bharathi Knitting Company v. DHL Worldwide Express Courier Division, (1996) 4 SCC 704]
Disclaimers of implied warranties must be carefully drafted in line with the law, and indemnity and liability caps should capture commercial intent.
Modern transactions create new complexities. Courts have recognised that digital products may qualify as “goods” where they have utility, can be sold, transferred, delivered, stored, and possessed. [Tata Consultancy Services v. State Of Andhra Pradesh, (2005) 1 SCC 308]
They are dynamic, frequently updated, and often licensed rather than sold, making implied warranties complex. Contracts for software, digital content, or cloud services should address updates, compatibility, and performance standards, ensuring liability is aligned with expectations.
“Lifetime warranty” is not defined under the SOGA, ICA, or CPA but is frequently used as a marketing tool to convey durability and quality, thereby enhancing consumer confidence. Under the CPA, any advertisements or contractual terms claiming a lifetime warranty may be treated as misleading or unfair trade practices if the claim is exaggerated, vague or cannot be performed. In Sunflame Enterprises Pvt. Ltd, the Central Consumer Protection Authority held that such claims can amount to deceptive advertisements. In practice, “lifetime warranty” is understood to mean the useful life of the product. Unilateral attempts to redefine or restrict may be treated as false guarantee.
Hence, when using the phrase “lifetime warranty” in contracts or marketing materials, the duration must be defined. It is important to ensure consistency of warranty terms across supply contracts, consumer warranty booklets, and advertisements to avoid consequences.
The concept of “no warranty” is the converse of implied warranties. Since implied warranties apply by default under the SOGA and ICA, sellers often use exclusion clauses such as “as-is-where-is” provisions to negate them and shift risk. These are common in contracts for property, asset transfers, or distress sales, where sellers seek finality by limiting liability.
Such exclusions have limits. Section 55 of the Transfer of Property Act, 1882 requires sellers to disclose material defects unknown to and undiscoverable by the buyer. Courts also apply constructive notice, deeming buyers aware of facts discoverable through diligence. While silence is generally not fraud under the ICA, failure to disclose where a duty exists may be. In Rekha Sahu v. UCO Bank, the Allahabad High Court observed that the burden of disclosure is shifting towards sellers, weakening the force of as-is-where-is clauses.
In practice, “no warranty” clauses are usually paired with acknowledgements that the buyer has inspected the goods and accepts the risks, along with non-reliance provisions. While valid in commercial contracts, disclaimers cannot override statutory protections, particularly under the CPA. Hence, disclaimers must be drafted narrowly and aligned with indemnity and liability caps to remain enforceable.
Drafting of warranties, indemnities, and liability limits must align with statutory provisions, judicial interpretation, and public policy. Express warranties should be precise, implied warranties must respect statutory protections, lifetime warranties need definition, and exclusions must be carefully crafted. Consistent drafting reduces risk, avoid disputes, and build consumer trust.
About the authors: Siddhi Ghatlia is a Partner, Palak Shah and Malini Mukherjee are Associates at ALMT Legal.
Disclaimer: The opinions expressed in this article are those of the author(s). The opinions presented do not necessarily reflect the views of Bar & Bench.
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