Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1942]

Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1942] UKHL 4 is a significant House of Lords decision that addresses the doctrine of frustration in English contract law. The case involves a contract between Fibrosa, a Polish textile company, and Fairbairn, a British firm, for the purchase of industrial machinery.

In July 1939, Fibrosa entered into a contract with Fairbairn to buy industrial machinery for £4,800. An advanced payment of £1,000 was made by Fibrosa, expecting the machinery to arrive within three to four months. However, the outbreak of World War II in September 1939 disrupted the contract. Fibrosa's agents sought a refund of the £1,000, as it became evident that machinery delivery for the Polish plant was impossible. Fairbairn refused, leading to legal proceedings initiated by Fibrosa in May 1940.

The House of Lords ruled in favour of Fibrosa. Viscount Simon criticised the Chandler case and specified that it applied only in cases where there was no failure of consideration. In this instance, there was a clear failure of consideration as Fibrosa received none of the ordered machinery. The frustration of the contract in this case did not fall under the rule in Chandler, allowing Fibrosa to succeed in its claim. Lord Wright highlighted that the claim was based on unjust enrichment, emphasising the need for legal remedies to prevent one party from retaining money or benefits against conscience.

The decision clarified the nature of actions for money had and received, which fall under the category of quasi-contract or restitution. Lord Mansfield's concept that the law implies a debt or obligation in cases of unjust enrichment was reinforced. The court recognised that the obligation belongs to a distinct category, neither purely contractual nor tortious.

The House of Lords rejected the idea of an actual promise but affirmed the law's implication of a debt or obligation based on the ties of natural justice and equity. Lord Mansfield's historical perspective on actions for money had and received as a means to prevent unjust enrichment was reaffirmed, emphasising the equitable nature of these actions.

In conclusion, this case established important principles regarding the doctrine of frustration and the legal remedies available in cases of unjust enrichment. The decision contributed to the development of quasi-contractual actions, emphasising their role in preventing unfair retention of money or benefits in situations where contracts are frustrated.
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