Warranty
Contract Law

A warranty is a promise or assurance given in contract by a party to the other party to the contract. Warranties come in different forms and flavours. The warranties given in a contract will depend upon the type of contract and the intention of the parties. Warranties should be contrasted with conditions of contract, which are fundamental terms of the contract (see below).

Sometimes, the purpose of a warranty is to provide comfort to the other party of the contract that a state of affairs will be legal binding. Entire agreement clauses give warranties increasing importance, as entire agreement clauses effectively exclude a party to a contract from commencing proceedings on the strength of pre-contractual misrepresentations, such as negligent and innocent misrepresentation, but not fraudulent misrepresentation.

Some warranties are implied by statute by default. This is to say, the words do not need to appear in the text of the contract where it is written, or the contract is an oral or verbal. For instance, the Sales of Goods Act implies warranties for the quiet enjoyment of goods purchased and that the goods will be of merchantable quality, amongst others. These warranties may be excluded in contracts between businesses (B2B contracts) but not contracts with consumers.

The difference between warranties and conditions of contract is that an innocent party is only entitled to sue the party in breach of a warranty, for damages for the breach of warranty. On the other hand, where a party is in breach of a condition contract, the innocent party may elect to 1. accept the breach and sue for damages, or in the alternative 2. terminate the contract (for the other party's repudiation of the contract) and sue for damages.  Prior to purporting to terminate a contract however, the innocent party must not have accepted the breach by conduct or words. Also, stipulations in contracts may be conditions of the contract although they are named as warranties in the agreement.