Failure of Consideration


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Failure of Consideration

As applied to contracts, this term does not necessarily mean a want of consideration, but implies that a consideration, originally existing and good, has since become worthless or has ceased to exist or been extinguished, partially or entirely. It means that sufficient consideration was contemplated by the parties at the time the contract was entered into, but either on account of some innate defect in the thing to be given, or nonperformance in whole or in part of that which the promisee agreed to do, nothing of value can be or is received by the promisee.

failure of consideration

n. not delivering goods or services when promised in a contract. When goods a party had bargained for have become damaged or worthless, failure of consideration (to deliver promised goods) makes the expectant recipient justified to withhold payment, demand performance or take legal action. (See: consideration, contract)

References in periodicals archive ?
The condictio causa data causa non secuta (sometimes shortened to condictio causa data, or condictio cd) is not therefore an equivalent to the failure of consideration unjust factor, despite the similarities, and the condictio indebiti is not--despite the similarities--a mistake action.
The parties had agreed to the exchange and so Lord Shaw felt it looked like both failure of consideration and a condictio causa data causa non secuta.
While not discussed in the opinion, it is not clear how this differs from the practice of boards setting their own cash compensation for board service, which, like the plan in Seinfeld, is generally subject entirely to the discretion of the board, absent corporate waste or a total failure of consideration.
The first is the lack of clarity as to what 'failure of consideration' actually means; the second is the way that the courts approach the requirement that the failure of consideration must be total.
Most authors cite the comments made by Lord Simon LC in Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Limited, to the effect that failure of consideration is all about performance.
The unanswerable objection to applying failure of consideration to the facts of Lumbers is not that the unjust factor is confined to money claims, but that the basis on which Builders did its work was that it would be paid by Sons, not by the Lumbers.
47) For recent recognition of the availability of failure of consideration as a ground of restitution for services, see Yeoman's Row Management Ltd v Cobbe [2008] 4 A11 ER 713, 736-7 (Lord Scott); see also at 718 (Lord Hoffmann), 751 (Lord Brown), 751 (Lord Mance).
If there is here a right to enforce repayment upon the basis of a failure of consideration, it is because, in the circumstances, the law imposes upon the respondent an obligation to make just restitution for a benefit derived at the expense of the appellants.
Another, which applied in Spangaro, is failure of consideration.
a legal failure of consideration that in effect sets aside the contract, it appears that no clause in the contract would be of much assistance to landlord.
The first was the principle that restitution will only be ordered for failure of consideration if the failure is total.
To the extent that the High Court recognised failure of consideration, however attenuated, as a ground of restitution for unjust enrichment, the decision supports that model.

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