Failure of consideration is a technical

legal Law is a set of rules that are created and are enforceable by social or governmental institutions to regulate behavior,Robertson, ''Crimes against humanity'', 90. with its precise definition a matter of longstanding debate. It has been vario ...

term referring to situations in which one person confers a benefit upon another upon some condition or basis ("

consideration Consideration is a concept of English common law and is a necessity for simple contracts but not for special contracts (contracts by deed). The concept has been adopted by other common law jurisdictions. The court in ''Currie v Misa'' declared ...

") which fails to materialise or subsist. It is also referred to as "failure of basis". It is an ' unjust factor' for the purposes of the law of unjust enrichment. Where there is a "total failure of consideration" the claimant can seek restitution of the benefit by bringing an action in unjust enrichment against the defendant. Historically speaking, this was as a

quasi-contract A quasi-contract (or implied-in-law contract or constructive contract) is a fictional contract recognised by a court. The notion of a quasi-contract can be traced to Roman law and is still a concept used in some modern legal systems. Quasi Contra ...

ual claim known as an action for money had and received to the plaintiff's use for a consideration that wholly failed. The orthodox view is that it is necessary for any relevant contract to be ineffective, for example because it is discharged for

breach Breach, Breached, or The Breach may refer to: Places * Breach, Kent, United Kingdom * Breach, West Sussex, United Kingdom * ''The Breach'', Great South Bay in the State of New York People * Breach (DJ), an Electronic/House music act * Miroslava ...

void Void may refer to: Science, engineering, and technology * Void (astronomy), the spaces between galaxy filaments that contain no galaxies * Void (composites), a pore that remains unoccupied in a composite material * Void, synonym for vacuum, a ...

''ab initio'' (from the beginning) or frustrated. However, it will be available on a subsisting contract where it does not undermine the contractual allocation of risk. Failure of consideration is a highly technical area of law. Particular areas of controversy include: *Whether the failure of the consideration must be 'total', and the scope and meaning of such a requirement; *Whether 'consideration' refers not only to bargained-for counter-performance by the defendant, but also a legal or factual state of affairs; *Whether this ground of restitution only applies to money claims or also extends to non-money benefits (e.g., chattels, services); *Whether this ground of restitution can be relied upon by a contract-breaker; *Whether the (now ineffective) contract has any impact upon (a) the availability of a claim; or (b) the valuation of any such claim; *Whether a failure of consideration can also generate proprietary remedies (e.g., a resulting trust); *Whether a claimant can elect to terminate a contract for breach and escape a 'bad bargain' by suing in unjust enrichment on the ground of total failure of consideration.

Cases

*''Rowland v Divall'', KB 500, 1923 *''D O Ferguson and Associates v M Sohl'', 1992: a building project was left incomplete. The contractor argued that much of the work had been done before they left the project so there was not a "total failure of contract". The contractor had been paid for more than the value of the work which was complete and the

Appeal Court A court of appeals, also called a court of appeal, appellate court, appeal court, court of second instance or second instance court, is any court of law that is empowered to hear an appeal of a trial court or other lower tribunal. In much of t ...

held that there had been "a failure of consideration" in respect of the overpaid amount. *'' Goss v Chilcott'', 1996 *''Giedo van der Garde BV v Force India Formula One Team Ltd.'', 2010 .

References

{{DEFAULTSORT:Failure Of Consideration Restitution Contract law

Cases

Further reading

References