Failure of Consideration CASES

In English contract law, failure of consideration occurs when one party does not deliver the promised consideration, or when the consideration provided is substantially different or insufficient from what was agreed, undermining the basis of the contract.

Definition and Principles

Failure of consideration arises when a party receives nothing, or substantially less than expected, after having performed their side of the bargain. Unlike “lack of consideration,” a failure of consideration typically emerges after contract formation and performance has begun.

Common Examples

• Payment made but goods never delivered.
• Goods or services provided are fundamentally different from those agreed upon.
• Advance payments made for events subsequently cancelled or frustrated.

Legal Implications

• May entitle parties to restitution, rescission, or recovery of payments made.
• Relevant in claims involving unjust enrichment or frustration of contract.

Practical Importance

Recognising failure of consideration clarifies parties’ rights to remedies and recovery, ensuring fairness when contractual promises aren’t honoured or delivered.