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Sender:
Lionel Smith
Date:
Tue, 20 Jul 2004 09:52:45 -0400
Re:
Failure of consideration - or not?

 

I tend to agree with Simon. Andrew said:

But on failure of consideration / purpose? If I pay you for something (i.e. access) that isn't yours to give, surely there's a failure of purpose: the fact that I'm buying certainty is irrelevant, and there's no indication that I intend to compromise my rights.

I think it is possible that there is no FOB even where something is paid for that cannot be given. Eg at a sheriff's sale, the sheriff makes no warranty of title and everyone knows it. If I buy goods and it turns out someone else owns them, there is no FOB. In Andrew's case and in the sheriff's sale, the seller always has something to give in the sense of binding himself to a contract, whether or not he has the proprietary right which the parties may think and hope he has.

I think the heart of it must be the last part of what Andrew says. I make the payment saying "this payment is conditional on its being the case that I have to buy this right of access from you." You either say "OK" or "forget it, I will only sell unconditionally like a sheriff." If you say "OK" there will be FOB if the HL overrules the CA. If you say "forget it", then I have to decide whether I want to take this risk myself, and of course you are also taking a risk, that I do not want to buy on those terms.

Of course it will often be unclear which of the two deals the parties have made, but that is just a question of fact I think, even if a difficult one. There is a line of this in Woolwich where the facts pointed to "forget it." In Andrew's case there was no agreement between the parties which seems clearly a case of "forget it" and suggests Rimer J got it right.

I think it is a separate question whether the time limit in the compulsory purchase legislation should be such as to allow for suspension of the running of time where there is litigation (or whether some general jurisdiction could allow the court to suspend it). That looks like the best solution to me.

 

Lionel


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