A representation which is subsequently made part of the contract ceases to be a representation and becomes something more, viz., a promise that such a thing is or shall be. Anson, Contract, 15th ed., 1920,p. 182.

The question then arises whether this representation, which has ceased to be a mere representation, and has become a term of the contract, is a condition or is a warranty.

A "warranty" is defined in the Sale of Goods Act (Ont. s. 2; U. K. s. 62) as meaning:

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. An earlier definition is that of Lord Abinger in Chanter v. Hopkins, 1838, 4M. & W. 399, at p. 404:

A warranty is an express or implied statement of something which the party undertakes shall be part of a contract; and, though part of the contract, yet collateral to the express object of it. A "condition" is not defined in the statute. A condition is a term which is "of the essence" of the contract or, in other words, which is " regarded by the parties as a vital term going to the root of the contract."

Anson, op. cit., pp. 183, 186.

A valuable note as to the terms "condition" and "warranty," with quotations from many sources, is contained in Chalmers, Sate of Goods, 7th ed. 1910, pp. 191 ff.

In Wallis v. Pratt, in a judgment which was approved by the House of Lords, ([1911] A.C. 394), Fletcher Moulton L.J. said ([1910] 2 K.B. 1003, at p. 1012):

A party to a contract who has performed, or is ready and willing to perform, his obligations under that concract is enabled to the performance by the other contracting part of all the obligations which rest upon him. But from a very early period of our law it has been recognized that such obligations are not all of equal importance. There are some which go so directly to the substance of the contract or, in other words, are so essential to its very nature that their non-performance may fairly be consi-derel by the other party as a substantial failure to perform the contract at all. On the other hand there are other obligations which, though they must be performed, are not so vital that a failure to perform them goes to the substance of the contract, Both classes are equally obligations under the contract, and the breach of any one of them entitles the other party to damages. But in the case of the former class he has the alternative of treating the contract as being completely broken by the non-performance and (if he takes the proper steps) he can refuse to perform any of the obligations resting upon himself and sue the other party for a total failure to perform the contract. Although the decisions are fairly consistent in recognizing this distinction between the two classes of obligations under a contract there has not been a similar consistency in the nomenclature applied to them. I do not, however, propose to discuss this matter, because later usage has consecrated the term "condition" to describe an obligation of the former class and "warranty" to describe an obligation of the latter class.

The Sale of Goods Act (Ont. s. 13; U.K. s. 11) provides: 13 - (2) Whether a stipulation in a contract of sale is a condition, the breach of which may give rise to a right to treat the contract as repudiated, or a warranty, the breach of which may give rise to a claim for damages but not to a right to reject the goods and treat the contract as repudiated, depends in each case on the construction of the contract. A stipulation may be a condition, though called a warranty in the contract.

In Bentsen v. Taylor, [1893] 2 Q.B. 274, at p. 281, Bowen L.J. said:

Of course it is often very difficult to decide as a matter of construction whether a representation which contains a promise, or which can only be explained on the ground that it is in itself a substantive part of the contract, amounts to a condition precedent, or is only a warranty. There is no way of deciding that question except by looking at the contract in the light of the surrounding circumstances, and then making up one's mind whether the intention of the parties, as gathered from the instrument itself, will best be carried out by treating the promise as a warranty sounding only in damages, or as a condition precedent by the failure to perform which the other party is relieved of his liability. In order to decide this question of construction, one of the first things you would look to is, to what extent the accuracy of the statement - the truth of what is promised - would be likely to affect the substance and foundation of the adventure which the contract is intended to carry out.

Examples of conditions:

Behn v. Burness, 1863, 3 B. & S. 751, 6 R.C. 492 (vessel "now in the port of Amsterdam").

Varley v. Whipp, [1900] 1 Q.B. 513 (reaping machine described as new the previous year and as having been used to cut only 50 or 60 acres) ; as to this case see 56.

Fisher, Reeves & Co. v. Armour & Co., [1920] 3 K.B. 614 (goods "ex store Rotterdam").

Examples of warranties:

New Hamburg Mfg. Co. v. Webb, 1911, 23 O.L.R. 44 (" rebuilt" engine).

Cameron v. McIntyre, 1915, 35 O.L.R. 206, 26 D.L.R, 638 (promise to give a written warranty that horse sound).

Hart-Parr Co. v. Wells, 1918, 47 Can. S.C.R. 344, 43 D.L.R. 686, affirming 11 Sask. L.R. 132. 40 D.L.R. 169 (warranty of good material and certain horse-power capacity) .

Case Threshing Machine Co. v. Mitten, 1919, 59 Can. S.C.R. 118, 49 D.L.R. 30, reversing l2 Sask. L.R. 1, 44 D.L.R. 40 (warranty excluded by terms of contract).

In the United States the use of the terms "condition" and " warranty" is different from their use in the Sales of Goods Act. In the latter statute the terms indicate two kinds of stipulations or promises - the performance of a condition being essential, and its breach therefore giving rise to the right to repudiate the contract, the performance of a warranty not being essential, and its breach therefore merely giving rise to a claim for damages. In the Uniform Sales Act, on the other hand, this distinction is obliterated, both kinds of promises being designated warranties, and the right to rescind the-contract and reject the goods being allowed for breach of warranty. The term "condition" is apparently used in the narrower sense of a term by which the obligation of either of the parties is made subject to the happening of a contingency or event, and not as including a promise, the performance of which is essential. See 54, where the relevant provisions of the Uniform Sales Act are quoted.

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