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Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd, [1942] UKHL 4, [1943] AC 32, [1942] 2 All ER 122

Facts:

D (UK firm) agreed to sell a machine to P (Polish firm). War broke out and UK could no longer deal with an enemy.

Issue(s):

Is P entitled to the return of the money he paid? To what degree can parties be relieved of a duty?

Ratio:

Where a party obtains no benefit from a contract (K), and they have paid part of a sum before frustration, then that party can recover the money paid in advance because it can be said there has been total failure of consideration.

Analysis:

If there has been what is called a total failure of consideration, then any money paid in advance can be recovered.

Rule in Chandler v Webster (another coronation case)
**The frustrating event does not end the K from its outset, but only from the point of frustration forwards
***Frustration does not release parties from further or future performance of a K – it does not undue what has already been done pursuant to the K
**P could not get back the deposit he paid – if payment was due after frustrating event then P would not have had to make the payment
**RULE IN THIS CASE IS WRONG

Holding:

Found in favour of P – the Polish firm can get back money paid and does not have to make any future payments to D.

Comments:

This case did not solve all of the problem Chandler created:
*In Chandler the tenant could still have used the room even though they could not view the parade
**So they would receive some benefit from the K
***Thus not amounting to total consideration


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