Lloyd's Maritime and Commercial Law Quarterly
Contract as the remedy for failure of consideration
David Campbell*
The judgment of the Supreme Court in Barton v Morris explores the possible responses to the “clash” of unjust enrichment with effective contracts which has been this century’s major innovation in high value contract litigation. Anxious to stress that “Unjust enrichment mends no-one’s bargain”, Lady Rose, with whom Lord Briggs and Lord Stephens agreed, found that the claimant had not established a contractual entitlement to payment for services it had rendered and from which the defendant had benefited. But, on such facts, this finding gives rise to an apprehension of what HHJ Pearce at first instance described as “an obvious apparent inequity”, and there must, then, be some sympathy for Lord Burrows’ finding that a term implied by law provided for “reasonable remuneration” or that an identical claim in unjust enrichment would do so. This, however, is unsatisfactory as it merely restates the clash. Lord Leggatt, dissenting, showed the way to avoid the clash. Building upon his judgment, it will be argued that, if the contractual morality of bargaining is properly understood, an entitlement to payment would be found without recourse to “well-meaning sloppiness of thought”, for that entitlement is stipulated by a term implied in fact subject to the “classic” tests of business efficacy on which the understanding of commercial contracting rests. The remedy for the perceived unjust factor of failure of consideration is proper understanding of consideration.
If, after the evidence is exhausted, it is found that both p and not-p are consistent with [the established facts], the presumptions laid down by the law decide in favour of one of the two alternatives.†
I. Introduction: The Clash of Contract and Unjust Enrichment
In a line of cases traceable to Roxborough v Rothmans of Pall Mall Australia Ltd,1 of which the leading English example is Benedetti v Sawiris,2 “reasonable remuneration” has been awarded to “correct” an “unjust enrichment” even though the terms of an effective contract
* Professor, Lancaster University Law School. I am grateful to John Carter and to the Editor and his referees for their comments.
† Michael Polanyi, Personal Knowledge, corrected edn (London, 1962), 278.
1. [2001] HCA 68; 208 CLR 516.
2. [2013] UKSC 50; [2014] AC 938.
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