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Dear all,

I think my response to Steve is yes, but also no. Perhaps a pithy exposition of how I see mispredictions would help.

A misprediction which becomes apparent, because the belief becomes falsifiable, when the transaction/contract is still executory or partially executed will count. That is I think why frustration operates, as a misprediction that bites when the contract is partially executed. If the prediction became falsifiable only after full execution there would be no relief, and most cases of misprediction on restitution fall into this category. May be I am just repeating myself from my earlier email, but this is the principled reason for treating some mispredictions differently. If the contract is partially executed the misprediction affects what you actually do. If it is fully executed it does not. If Steve is implying there is no principled basis, as I think he is, I must disagree.

The part with which I do agree is where Steve says "The question is not, ultimately, what the parties expected or predicted, but what sort of circumstances their agreement provides for."

True, up to a point. If we take the risk of being mistaken we can have no relief, and Great Peace Shipping confirms this for us. I do not think we have to abandon mistake though. We need a cause of action, and I do not think not having provided for the eventuality provides one. Taking the risk, or providing for the occurrence may bar relief, but we still need the mistake to justify relief in the first place. That said it won't be very often, certainly not if Solle v Butcher really has gone, and we take a rather bold Court of Appeal's word for it.

Duncan Sheehan

-----Original Message-----

From: Enrichment - Restitution & Unjust Enrichment Legal Issues
[mailto:ENRICHMENT@LISTS.MCGILL.CA]On Behalf Of Steve Hedley
Sent: Thursday, October 17, 2002 4:17 PM
To: ENRICHMENT@LISTS.MCGILL.CA
Subject: [RDG:] Solle v. Butcher bites the dust

Duncan Sheehan wrote:-

I think what this amounts to is saying that frustration in contract represents a special type of misprediction that works, but does not affect the general rule that mispredictions do not count.

... which in turn suggests that, if there is a principled basis for combining the restitution and the contract doctrines, it isn't to be found in the mistake/misprediction distinction - unless of course there is a principled reason why one particular type of misprediction is treated differently from all the others.

If we ask rather about the basis of the transaction (or "the parties' common assumptions", if you prefer), the similarities are more straightforward. It is enough that the parties' agreement embodied an assumption, which turned out to be inaccurate. Whether the mistake could in principle have been discovered before the payment or not is beside the point. This leaves us with the problem of saying which types of assumption are fundamental enough to matter, but I think we have that problem anyway.

Of course, most of the cases will in practice involve mistakes - the argument is that it is not convenient or analytically correct to base them on that. Indeed, as we know, the same principles have been applied where one party was not mistaken at all, but nonetheless their transaction embodies a false assumption - as where money is demanded and paid on the basis that it is due, the payor already realising that it is not in fact due (Woolwich, the last 5 overpayments in Nurdin). The question is not, ultimately, what the parties expected or predicted, but what sort of circumstances their agreement provides for.

All of this, of course, suggests a very narrow ambit for the doctrine of frustration, as well as "mistake".

Steve Hedley

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FACULTY OF LAW, UNIVERSITY OF CAMBRIDGE

ansaphone : +44 1223 334931
www.stevehedley.com
fax : +44 1223 334967

Christ's College Cambridge CB2 3BU
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