(i) Failure of the Defendant to Perform His or Her Part of the Bargain

The usual interpretation of basis relates to where the condition on which the transfer of the benefit is contingent is the promised performance by the defendant for which the claimant had bargained.^[1] So, for example, if the claimant and the defendant entered into a contract whereby the defendant agreed to sell a car to the claimant for ?10,000, the claimant paid the full price in advance but the defendant failed to supply the car, the basis for the claimant’s payment will have failed because the claimant did not receive from the defendant what she had promised to provide. In such a situation the claimant would usually sue for compensatory damages for breach of contract, but a restitutionary remedy would be more attractive if the value of the car was less than ?10,000, since damages for breach of contract would be assessed by reference to the value of the car which the claimant should have received, which would be less than the money received by the defendant.

The defendant’s expected performance need not, however, arise in a contractual context for the claimant to establish that the basis has failed. In Spaul v Spaul^[2] Romer LJ recognized that there could be a failure of basis where there was a failure of an informal arrangement which fell short of a binding contract, but there still had to be some form of joint endeavour between the parties. So, for example, if the claimant provided a benefit to the defendant on the understanding that it would be paid for under a contract which the parties were negotiating, but the negotiations failed due to the withdrawal of the defendant, the claimant should be able to recover the value of the benefit on the ground of total failure of basis,^[3] even though the defendant was not obliged by contract to pay for the benefit, because of the mutual expectation that a contract would be made.^[4]

• [1] Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32, 48 (Viscount Simon LC);Stocznia Gdanska SA v Latvian Shipping Co [1998] 1 WLR 574, 588 (Lord Goff); Barnes v Eastenders Cash andCarry plc [2014] UKSC 26, [2015] AC 1, [106] (Lord Toulson).
• [2] [2014] EWCA Civ 679, [46]. 19 See p 343, below.
• [3] 20 Although this could equally be analysed as the failure of a contingent condition that a contract would be
• [4] made, see below.