Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd
| Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Lt | |
|---|---|
The Invasion of Poland 1939
|
|
| Court | House of Lords |
| Citation(s) | [1942] UKHL 4, [1943] AC 32, [1942] 2 All ER 122 |
| Case opinions | |
| Lord Wright | |
| Keywords | |
| Frustration | |
Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1942] UKHL 4 also known as the Fibrosa case, is a leading English decision of the House of Lords on contract law and the doctrine of frustration.
Fibrosa, a Polish company, agreed to buy some machinery for £4,800 from Fairbairn, an English-based company. In July 1939, Fibrosa made a payment of £1,000 as part of the agreement. By September Germany had invaded Poland and Britain had declared war. Fibrosa attempted to get the payment back but Fairbairn refused arguing that the invasion frustrated the contract. Fibrosa brought an action against Fairbairn.
The lower courts held, taking as their authority Chandler v Webster [1904] 1 KB 493, that where a contract has been frustrated by a supervening event, "the loss lies where it falls", with the result that sums paid or rights accrued before that event are not to be surrendered, but that all obligations falling due for performance after that event are discharged. Consequently, the lower courts rejected Fibrosa's claim to recover the £1,000.
The House of Lords found in favour of Fibrosa. Viscount Simon was critical of the Chandler case and found that it would only apply where there has not been any failure of the consideration. However, in the circumstances, there was a failure of the consideration as Fibrosa had not received any part of the machinery that was ordered in exchange for the payment. Consequently, the frustrated contract would not follow the rule in the Chandler decision and so Fibrosa could collect.
Lord Wright said the claim was based on unjust enrichment.
By 1760 actions for money had and received had increased in number and variety. Lord Mansfield C.J., in a familiar passage in Moses v Macferlan, sought to rationalize the action for money had and received, and illustrated it by some typical instances. "It lies," he said, "for money paid by mistake; or upon a consideration which happens to fail; or for money got through imposition (express, or implied;) or extortion; or oppression; or an undue advantage taken of the plaintiff's situation, contrary to laws made for the protection of persons under those circumstances. In one word, the gist of this kind of action is, that the defendant, upon the circumstances of the case, is obliged by the ties of natural justice and equity to refund the money." Lord Mansfield prefaced this pronouncement by observations 136 which are to be noted. "If the defendant be under an obligation from the ties of natural justice, to refund; the law implies a debt and gives this action [sc. indebitatus assumpsit] founded in the equity of the plaintiff's case, as it were, upon a contract ('quasi ex contractu' as the Roman law expresses it)." Lord Mansfield does not say that the law implies a promise. The law implies a debt or obligation which is a different thing. In fact, he denies that there is a contract; the obligation is as efficacious as if it were upon a contract. The obligation is a creation of the law, just as much as an obligation in tort. The obligation belongs to a third class, distinct from either contract or tort, though it resembles contract rather than tort. This statement of Lord Mansfield has been the basis of the modern law of quasi-contract, notwithstanding the criticisms which have been launched against it. Like all large generalizations, it has needed and received qualifications in practice. There is, for *63 instance, the qualification that an action for money had and received does not lie for money paid under an erroneous judgment or for moneys paid under an illegal or excessive distress. The law has provided other remedies as being more convenient. The standard of what is against conscience in this context has become more or less canalized or defined, but in substance the juristic concept remains as Lord Mansfield left it.
...
Wikipedia