
Contents
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1. General Principles 1. General Principles
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(A) The Principle of Failure of Basis (A) The Principle of Failure of Basis
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(B) The Grounds of Restitution Founded on the Principle of Failure of Basis (B) The Grounds of Restitution Founded on the Principle of Failure of Basis
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(C) The Definition of Basis (C) The Definition of Basis
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(i) Failure of the Defendant to Perform Their Part of the Bargain (i) Failure of the Defendant to Perform Their Part of the Bargain
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(ii) Failure of a Contingent Condition (ii) Failure of a Contingent Condition
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(D) The Nature of the Enrichment (D) The Nature of the Enrichment
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(E) The Relationship between Damages for Breach of Contract and Restitution to Reverse Unjust Enrichment (E) The Relationship between Damages for Breach of Contract and Restitution to Reverse Unjust Enrichment
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2. Establishing Total Failure of Basis 2. Establishing Total Failure of Basis
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(A) The Requirements for Establishing Total Failure of Basis (A) The Requirements for Establishing Total Failure of Basis
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(i) The Contract Must Cease to Be Operative (i) The Contract Must Cease to Be Operative
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(ii) The Defendant Is No Longer Ready, Willing, and Able to Perform (ii) The Defendant Is No Longer Ready, Willing, and Able to Perform
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(iii) The Basis Must Have Failed Totally (iii) The Basis Must Have Failed Totally
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(1) Determining Whether the Basis Has Failed (1) Determining Whether the Basis Has Failed
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(2) Distinguishing between Contracts to Sell and Contracts to Build and Sell (2) Distinguishing between Contracts to Sell and Contracts to Build and Sell
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(3) Contracts to Provide Services (3) Contracts to Provide Services
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(B) Manipulating Total Failure of Basis (B) Manipulating Total Failure of Basis
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(i) Receipt of Collateral Benefit (i) Receipt of Collateral Benefit
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(ii) Apportionment of the Basis (ii) Apportionment of the Basis
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(C) Is the Requirement that the Basis must Totally Fail Defensible? (C) Is the Requirement that the Basis must Totally Fail Defensible?
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(i) Arguments in Favour of Recognizing Partial Failure of Basis (i) Arguments in Favour of Recognizing Partial Failure of Basis
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(ii) Arguments against Recognizing Partial Failure of Basis (ii) Arguments against Recognizing Partial Failure of Basis
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(iii) The Consequences of Recognizing Partial Failure of Basis (iii) The Consequences of Recognizing Partial Failure of Basis
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(iv) Will the Courts Recognize Partial Failure of Basis? (iv) Will the Courts Recognize Partial Failure of Basis?
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(D) Restitution from Third Parties (D) Restitution from Third Parties
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3. The Operation of Total Failure of Basis 3. The Operation of Total Failure of Basis
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(A) Contracts which are Terminated for Breach (A) Contracts which are Terminated for Breach
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(i) Breach of Contract by the Defendant (i) Breach of Contract by the Defendant
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(1) Restitution of Money Paid (1) Restitution of Money Paid
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(2) Restitution of Non-Money Benefits (2) Restitution of Non-Money Benefits
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(3) Losing Contracts (3) Losing Contracts
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(4) Compensatory Damages for Wasted Expenditure (4) Compensatory Damages for Wasted Expenditure
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(ii) Breach of Contract by the Claimant (ii) Breach of Contract by the Claimant
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(1) Restitution of Money Paid (1) Restitution of Money Paid
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(2) Restitution of Non-Money Benefits (2) Restitution of Non-Money Benefits
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(B) Anticipated and Incomplete Contracts (B) Anticipated and Incomplete Contracts
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(i) Establishing Unjust Enrichment (i) Establishing Unjust Enrichment
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(ii) Risk-Taking (ii) Risk-Taking
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(iii) Introducing a Fault Requirement (iii) Introducing a Fault Requirement
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(iv) Unconscionability (iv) Unconscionability
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(v) Alternative Claims (v) Alternative Claims
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(C) Unenforceable Contracts (C) Unenforceable Contracts
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4. Partial Failure of Basis 4. Partial Failure of Basis
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(A) The Definition of Frustration (A) The Definition of Frustration
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(B) Restitution of Benefits Transferred before Performance is Frustrated (B) Restitution of Benefits Transferred before Performance is Frustrated
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(i) The Common Law (i) The Common Law
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(ii) The Law Reform (Frustrated Contracts) Act 1943 (ii) The Law Reform (Frustrated Contracts) Act 1943
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(1) Restitution of Money (1) Restitution of Money
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(2) Restitution of Non-Money Benefits (2) Restitution of Non-Money Benefits
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(C) The Need for Principled Reform (C) The Need for Principled Reform
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(i) Arguments against Loss Apportionment (i) Arguments against Loss Apportionment
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(ii) Arguments in Favour of Loss Apportionment (ii) Arguments in Favour of Loss Apportionment
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(iii) A Middle Way (iii) A Middle Way
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(D) Another Example of Partial Failure of Basis: Rejection of Goods (D) Another Example of Partial Failure of Basis: Rejection of Goods
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5. Void Transactions 5. Void Transactions
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(A) Uncertainty as to the Ground of Restitution (A) Uncertainty as to the Ground of Restitution
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(B) Total Failure of Basis (B) Total Failure of Basis
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(i) Pre-Incorporation Contracts (i) Pre-Incorporation Contracts
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(ii) Infancy (ii) Infancy
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(iii) Absence of Authority (iii) Absence of Authority
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(iv) Statutory Formalities (iv) Statutory Formalities
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(C) Absence of Basis (C) Absence of Basis
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(i) The Annuity Cases (i) The Annuity Cases
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(ii) Payments to Discharge a Liability Which Does Not Exist (ii) Payments to Discharge a Liability Which Does Not Exist
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(iii) The Swaps Litigation (iii) The Swaps Litigation
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(1) The Effect of Subsequent Decisions (1) The Effect of Subsequent Decisions
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(2) The Relationship between Absence of Basis and Total Failure of Basis (2) The Relationship between Absence of Basis and Total Failure of Basis
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(3) Fully Executed Transactions (3) Fully Executed Transactions
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(4) Nullity of Purpose (4) Nullity of Purpose
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(5) Policy of Invalidity (5) Policy of Invalidity
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(D) Illegality (D) Illegality
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(E) Should Absence of Basis be Recognized as a Ground of Restitution? (E) Should Absence of Basis be Recognized as a Ground of Restitution?
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Cite
Abstract
This chapter examines the principle of failure of basis and the grounds of restitution which are founded on the principle. The first is the ground of total failure of basis. Identifying a basis is considered, as is the interpretation of the total failure requirement. Methods for establishing a total failure are examined, including collateral basis and apportionment. The operation of the total failure of basis ground in different contexts where contracts are no longer applicable is examined, including following breach and where the contract is anticipatory. The chapter also considers whether a partial failure of basis ground should be recognized and examines how such a ground operates when a contract is frustrated. Finally, the chapter examines the ground of absence of basis where the underlying transaction is void and how this relates to the ground of total failure of basis.
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