Home  /  Indian Contract Act  /  Section 117

Section 117: Sections 76 to 123 [Repealed by the Indian Sale of Goods Act, 1930]

Indian Contract Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 1872
Section 116 All 266 Sections of Indian Contract Act Section 118

Legal Commentary & Landmark Judgments: Section 117

Historical Section 117 of the Indian Contract Act, 1872 regulated the remedies available to a buyer upon a seller's breach of warranty, providing that the buyer was not entitled to reject the goods after acceptance, but could plead the breach in diminution or extinction of the price, or institute an action for damages. Transposed into Section 59 of the Sale of Goods Act, 1930, this provision establishes the procedural mechanics of warranty enforcement.

  • Preservation of Contractual Nexus: A breach of warranty gives rise to a claim for damages or price reduction, but not to an automatic right to repudiate the contract or reject the goods once property has passed.
  • Dual Remedial Channels: The buyer may: (a) set up against the seller the breach of warranty in diminution or extinction of the price; or (b) sue the seller for damages for breach of warranty.
  • Measure of Damages: The measure of damages is the estimated loss directly and naturally resulting in the ordinary course of events from the breach, prima facie the difference between the actual value of the goods at delivery and the value they would have had if conforming to warranty.
Key Landmark Precedents:
  • Mondel v. Steel (1841) 8 M & W 858: Landmark authority establishing the rule that a defendant in an action for the price of goods may defend himself by showing how much less the subject-matter is worth by reason of the breach of warranty, and may maintain a separate suit for consequential damages.
  • Murlidhar Chiranjilal v. Harishchandra Dwarkadas AIR 1962 SC 366: The Supreme Court affirmed that under Indian contract and sales jurisprudence, compensation for breach of warranty is measured by the natural and direct loss under the rule in Hadley v. Baxendale, requiring proof of prevailing market values at the time of delivery.
Courtroom Practice & Strategic Litigation Guidance:

When sued by a supplier for unpaid invoices, file a counterclaim or set-off pleading breach of warranty in diminution of price under Section 59 of the Sale of Goods Act. Ensure that contemporaneous notice of defect was issued to the seller upon receipt of the goods to defeat arguments of waiver or acquiescence.

Section 116 All 266 Sections of Indian Contract Act Section 118