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

Court: House of Lords

Facts: Fibrosa, a Polish company, paid £1,000 for machinery to be delivered within a few months. The outbreak of World War II made delivery impossible. Fibrosa sought a refund of the advance payment, but Fairbairn refused.

Issue: Can a contract be rescinded due to frustration, allowing recovery of advance payments when performance is impossible?

Held: The House of Lords ruled in favor of Fibrosa, allowing recovery of the advance payment. The court recognized the doctrine of frustration and emphasized unjust enrichment as grounds for restitution.

Key Judicial Statement: Viscount Simon commented, "The frustration of the contract due to the impossibility of performance justifies the recovery of payments made under the contract."

💡Leveluplaw: The doctrine of frustration allows for the recovery of advance payments when a contract becomes impossible to perform due to unforeseen events. This case highlights the role of unjust enrichment in contract law.