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(b) That's right. The sale of goods legislation makes the same distinction as the common law between conditions and warranties, and provides essentially similar remedies in the event of a breach.

For a breach of a condition implied into the contract by the sale of goods legislation, a buyer is entitled to 'reject the goods and treat the contract as repudiated'.  Under the legislation, damages for a breach of condition may also be claimed if the breach causes loss.

In the circumstances of the present case, where the goods are still being manufactured, A can  reject them and claim damages from B.

In the event of a breach of a statutorily implied warranty (as oposed to a condition) a buyer may not reject the goods, but may claim damages for less arising from the breach.

Click here to see the relevant legislation.