Chapter: 1.1 Defect and Deficiency

Defect and Deficiency

Defect and Defective Goods:
Section 2(i) of the Act defines "goods" in the same manner as defined in the sale of Goods Act, 1930. In other words all movable property other than actionable claim and money but including shares and stocks, standing timber, growing crops, grass and things attached to or forming part of the land which can be severed pursuant to a contract of sale are covered within the scope of definition of the word "goods"

Thus "defective goods" are those goods or movable properties which are suffering from any of the following:
a)    Fault
b)    Imperfection
c)     Shortcoming
Such fault, imperfection or shortcoming may relate to either
a)    Quality, or
b)    Potency, or
c)    Purity, or
d)    Standard

But a person who obtains goods for resale or for commercial purpose is not a consumer as defined u.s. 2(d) of the Act.

Deficiency in Service:
Deficiency in service has been defined under Section 2(g) of the Act. Deficiency means any fault, imperfection or shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under ant lad for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service. Thus deficiency in serf ice is the shortcoming or inadequacy in serf ice and has to be measured with reference to standards specified either under the law or in the contract between the parties. The standard referred to abet e may relate either to the quality of service or nature and manner of performance required to be maintained by the person rendering the said service. But a serf ice rendered free of charge or under a contract of personal serf ice is not covered. The definition of service now excludes service hired for commercial purpose unless the same fleas hired exclusively for the purpose of earning livelihood L IT means of self employment. Consequently a person nacho as ails of service for any commercial Purpose is not included within the definition of 'Consumer' unless the same vitas done exclusively for the purpose of earning lit livelihood by means of self-employment

PRIMARY AND SECONDARY TERMS (SIMILAR TO CONDITIONS AND WARRANTIES IN A CONTRACT OF SALE) IN A CONTRACT OF SERVICE:

In a contract of Serf ice certain terms may be treated as primary or fundamental while others may be considered as collateral or secondary. The express terms and conditions of a contract can be easily ascertained bar reading the contract document. The parties may ascertain the implied conditions and warranties. While breach of primary or fundamental condition enables the affected party to repudiate or set aside the contract, breach of secondary or collateral term car stipulation does not entitle the affected party to claim damages. The concept of primary/ fundamental terms and secondary /collateral terms can be understood better with reference to the (an analogy may be made) conditions and warranties in respect of sale of goods.

We feel better understanding of the above concept is important particularly in respect of expert am ice rendered by medical professionals guaranteeing better health in the event patient folios the prescribed route. It can be said that an expert advice by its very nature has an element of guarantee and the expert rendering such an advice has the responsibility to ensure that the same is correct, well considered and complete as far as practicable. In the event it is found that an expert (doctor or a specialist as the case may be) was negligent either in performing examination or in giving advice/instruction on special care or caution to be exercised by patient or in prescribing medicine he becomes liable for deficiency in service rendered by him. In such a case merely because the patient did not follower some minor instruction was not material or relevant does not enable him to disown.

Section 12 of the Sale of Goods Act 1930 makes a clear distinction between "conditions" and "warranty".

While a condition is a stipulation essential to the main purpose of the contract, warranty is a stipulation collateral to the main purpose of the contract. While breach of a condition enables the affected party to repudiate the contract breach of a warranty does not do so but gives rise to a claim for damages. Whether a stipulation in a contract of sale is a condition or warranty depends in each case on the construction of the contract. A stipulation may be a condition though called a warranty in the contract.

The Sale of Goods Act 1930 provides for following implied-conditions and warranties:
1)    IMPLIED CONDITIONS:

a)    Seller has right to sell the goods in the case of sale.
b)    Seller will have a right to sell the goods at the time w hen the property is to pass to buyer in an agreement to sell.
c)    Where goods are sold by description, goods correspond with the description.
d)    Where goods are sold by sample as well as description bulk of Foods should not only correspond to the sample but also to description.
e)    Where buyer makes it known to seller the particular purpose for which goods are required so as to show that he relied on the skill or judgment of the seller and the seller is in the business of selling such goods, goods shall be reasonably fit for such purpose.
f)    Where goods are bought by description from a seller who deals in goods of that description goods shall be of merchantable quality.
g) An implied condition as to quality or fitness may be annexed to usage or trade and an express condition does not negative such an implied condition unless the same is inconsistent with the former.
h) In case of a contract of sale by sample there is not only an implied condition that the bulk shall correspond with the sample in quality and the buyer shall have a reasonable opportunity of comparing the bulk with sample but also that the goods shall be free from any defect rendering them unmerchantable which would not be apparent on reasonable examination of the sample.

II) IMPLIED WARRANTIES:

a) An implied warranty that buyer shall have the right to enjoy quiet possession of the goods.
b) An implied warranty that goods shall be free from any charge, or encumbrances in favour of any third party not declared or known to the buyer before or at the time when the contract is made.
c) An implied warranty as to quality or fitness for a particular purpose may be annexed by usage or trade. Further an express warranty does not negate an implied warranty unless the latter is inconsistent with the former.

EXCLUSION OF IMPLIED TERMS AND CONDITIONS:
Section 62 of the Sale of Goods Act 1930 provides that implied conditions and warranties may be negative or varied by express agreement or by the course of dealing between the parties, or by usage, if the usage is such as to bind both parties to the contract.

While defect in goods and deficiencies in service rendered to consumer may be determined with reference to the Consumer Protections Act, terms and conditions of-contract and other relevant legislations such as Sale of Goods Act, the questions relating to sale of hazardous goods, overcharging or failure to provide information relating to manner of use of products, precautions to be taken to avoid injury or harm, price of the products etc. have to be determined with reference to relevant statues such as Standards of Weight and Measures

Act. Packaged Commodities Rules, Drugs and Cosmetics Act, Environmental Protection Act, Hazardous Chemicals related rules etc. apart from custom and usages of the trade.

As per the law laid down by Supreme Court while breach of a primary Condition or fundamental terms by the recipient of service in a contract of service enables the party which has undertaken to provide 'service' to repudiate the contract, breach of secondary or collateral stipulation does not enable the provider of service to repudiate the contractual liability undertaken by it totally.