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=== At common law === * Law Reform (Frustrated Contracts) Act 1943, s. 2(5) ** This Act shall not apply— *** (a) to '''any charter party''', except a time charterparty or a charterparty by way of demise, or to any contract (other than a charterparty) for the carriage of goods by sea; or *** (b) to '''any contract of insurance''', save as is provided by subsection 5 of the foregoing section; or *** (c) to any contract to which [section 7 of the Sale of Goods Act 1979] (which avoids contracts for the sale of specific goods which perish before the risk has passed to the buyer) applies, or to any other contract for the sale, or for the sale and delivery, of specific goods, where the contract is frustrated by reason of the fact that the goods have perished. * Common law starts from the position that all '''future obligations were discharged''', but that '''obligations incurred prior to the frustrating event survived'''. ** Loss lies where it falls. Who bears the financial loss depends entirely on the contract's terms (e.g., when payment was due). This could lead to unjust results. * Common Law resolution * Appleby v Myers (1867) LR 2 CP 651 ** Principle: If a party works under an entire contract and partially performs *** But fails to complete due to frustration (not breach) *** Recover nothing for the work done. The loss lies where it falls. * Fibrosa Spolka Ackcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] A.C. 32 ** Money paid in advance can be recovered if there is a total failure of consideration (the payer received no part of the expected benefit). ** The payee cannot deduct for expenses incurred in preparation. Mitigates the harshness of Chandler v Webster. * Whincup v Hughes (1870-71) LR 6 CP 78 ** If the payer has received any part of the benefit expected by him under the contract. ** The failure of consideration is regarded as partial and not as total ** Money cannot be recovered back merely because the consideration for the payment fails in part.
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