created by the common law rule were addressed by Parliament in the Law Reform (Frustrated Contracts) Act 1943, considered below, but the unjust enrichment principle is also relevant in other respects in determining whether a particular event is capable of frustrating a contract. If the decision to treat a contract as frustrated might give one of the parties an undue advantage this may operate as a justification for refusing to treat the contract as frustrated. For example, in Tamplin SS Co v Anglo-Mexican Petroleum Products Co Ltd, an oil tanker was chartered for a period of five years, but was subject to government requisition when the charterparty still had nearly three years to run. In the circumstances, there was no prejudice to the charterers, since the government compensation payable to the charterers exceeded the agreed hire charges. However, the owners of the ship claimed that the contract was frustrated. The House of Lords held, by a narrow majority, that the contract was not frustrated. One explanation for the action of the owners is that they wanted to secure the increased benefit of the government compensation in replacement for the lower hire charges. In this case, it is readily understandable that the majority of the House of Lords preferred not to allow the owners to benefit in this way at the expense of the charterers. Remedies, unjust enrichment and frustration Money paid or payable before the date of frustration : Where a contract is frustrated, the common law rule stipulates that the parties are discharged from their respective obligations from the date of the frustrating event. A particular problem with this rule is that prior to the date of frustration, it is quite possible that one of the parties has made an advance payment for the goods or services which are the subject matter of the contract.

doi:10.4324/9781843141518-154

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created by the common law rule were addressed by Parliament in the Law Reform (Frustrated Contracts) Act 1943, considered below, but the unjust enrichment principle is also relevant in other respects in determining whether a particular event is capable of frustrating a contract. If the decision to treat a contract as frustrated might give one of the parties an undue advantage this may operate as a justification for refusing to treat the contract as frustrated. For example, in Tamplin SS Co v Anglo-Mexican Petroleum Products Co Ltd, an oil tanker was chartered for a period of five years, but was subject to government requisition when the charterparty still had nearly three years to run. In the circumstances, there was no prejudice to the charterers, since the government compensation payable to the charterers exceeded the agreed hire charges. However, the owners of the ship claimed that the contract was frustrated. The House of Lords held, by a narrow majority, that the contract was not frustrated. One explanation for the action of the owners is that they wanted to secure the increased benefit of the government compensation in replacement for the lower hire charges. In this case, it is readily understandable that the majority of the House of Lords preferred not to allow the owners to benefit in this way at the expense of the charterers. Remedies, unjust enrichment and frustration Money paid or payable before the date of frustration

ABSTRACT

If the decision to treat a contract as frustrated might give one of the parties an undue advantage this may operate as a justification for refusing to treat the contract as frustrated. For example, in Tamplin SS Co v Anglo-Mexican Petroleum Products Co Ltd,92 an oil tanker was chartered for a period of five years, but was subject to government requisition when the charterparty still had nearly three years to run. In the circumstances, there was no prejudice to the charterers, since the government compensation payable to the charterers exceeded the agreed hire charges. However, the owners of the ship claimed that the contract was frustrated. The House of Lords held, by a narrow majority, that the contract was not frustrated. One explanation for the action of the owners is that they wanted to secure the increased benefit of the government compensation in replacement for the lower hire charges. In this case, it is readily understandable that the majority of the House of Lords preferred not to allow the owners to benefit in this way at the expense of the charterers.