¹ Williston, , A Treatise on the Law of Contracts (3rd ed. by Jaeger, ) §1473.Google Scholar

² 25 L.S.I. 11. Hereinafter we shall refer to this Law as the Remedies Law.

³ See Hunt v. Silk (1804) 5 East 449, 102 E.R. 1142; Thorpe v. Fasey [1949] Ch. 649. The same rule was adopted in Israel—see e.g., Friedleawski v. Heller (1964) (1) 18 P.D. 98, 106.

⁴ See e.g. Sumpter v. Hedges [1898] 1 Q.B. 673 and Goff, and Jones, , The Law of Restitution (London, 1966) 265Google Scholar, 342 (hereinafter referred to as Goff and Jones). This rule is, however, subject to a number of exceptions. It does not, for instance, apply to a contract for the sale of goods. Hence a purchaser who has received less than the contracted quantity of goods, must pay for or return the same—see Oxendale v. Wetherell (1829) 9 B & C. 386; 109 E.R. 143. This rule is now embodied in sec. 30 (1) of the Sale of Goods Act, 1893, which provides that payment for the goods shall be at the contract rate. We shall later discuss briefly this question with reference to the local Sale Law. Another exception to the rule that the court will not assess the value of partial consideration, exists in favour of the injured party who rescinds his contract on account of its breach; such party is entitled to a quantum meruit payment for work done by him under the contract prior to its rescission—see Planeé v. Colburn (1831) 8 Bing 14; 131 E.R. 305; 5 Car & P. 58; 172 E.R. 876. Likewise, cases of frustration of contract are now governed in England by the Law Reform (Frustrated Contracts) Act, 1943. For the law in England prior to this Act, see Williams, , “Partial Performance of Entire Contracts” (1941) 57 L.Q.R. 373, 374.Google Scholar As regards the innovations of the Act, see Williams, , The Law Reform (Frustrated Contracts) Act, 1943 (1944).Google Scholar

⁵ (1804) 5 East 449, 102 E.R. 1142.

⁶ However, this decision has also been explained as being based on affirmation of the contract and waiver of the right to rescind (see Goff and Jones 343).

⁷ Moreover, under sec. 9, the injured party who rescinds the contract, may choose to pay for that which he received under the contract even if restoration in specie is possible. Similarly, with regard to benefits received by the party in breach, the injured party may require that the party in breach pay him the value thereof, even though the latter is willing to make restoration in specie.

⁸ Sec. 20 of the Remedies Law would have allowed the rental to be set off against the amount paid by the tenant. Sec. 9 of the Law raises many questions which fall beyond the scope of this article. For a general discussion of sec. 9, see Yadin, , “The Contracts (Remedies for Breach of Contract) Law, 1970” in the series Commentaries on the Contracts Laws (edited by Tedeschi, G., 1973, in Hebrew) 69–72.Google Scholar

⁹ Cf. sec. 43 (a)(2) of the Contracts (General Part) Law, (1973) S.H. no. 694: “The date for the fulfilment of the obligation is postponed if its fulfilment is conditional upon the prior fulfilment of an obligation of the creditor—until such obligation has been fulfilled”. See also sec. 43 (a) (3) which provides: “If the parties must fulfil their obligations pari passu”, then a party to the contract may also delay performance of his part, unless the other party is “prepared to fulfil the obligation imposed on him”. See also on this Law, Shalev, , “General Comments on Contracts (General Part) Law, 1973” (the English translation of the Law is appended at p. 282) (1974) 9 Is.L.R. 274Google Scholar and Yadin op. cit., 20–31; Smith v. Brady, 17, N.Y. 173, 187 (1858) per Comstock J.

¹⁰ When the contract is divisible English law also provides a remedy in respect of the parts fully performed. See Roberts v. Havelock (1832) 3 B & Ad. 404; 110 E.R. 145; Williams' article op. cit. at p. 374. It may be noted that the Remedies Law refers to the divisibility of a contract under the second Article of Chapter II, which is concerned with rescission of contract, and does not include any general provision on the subject.

¹¹ Pousard v. Spires [1876] 1 Q.B.D. 410, 414; Robinson v. Davidson (1871) L.R. 6 Ex. 269. Another example is that of an author who contracts to write a book and then becomes of unsound mind. See Jackson v. Union Marine Insurance Co. Ltd. (1874) L.R. 10 C.R 125, 145.

¹² Sec. 18 reads as follows:

Exemption by reason of constraint or frustration of contract

a) Where the breach of contract is the result of circumstances which at the time of making the contract the person in breach did not know of or foresee and need not have known of or foreseen, and which he could not have avoided, and performance of the contract under these circumstances is impossible or fundamentally different from what was agreed between the parties, the breach shall not give cause for enforcement of the contract or for compensation.

b) In the cases referred to in subsection (a), the Court may, whether or not the contract has been rescinded, require each party to restore to the other party what he has received under the contract, or, at his choice as provided in section 9, to pay him the value thereof, and require the person in breach to indemnify the injured party for expenses reasonably incurred and liabilities reasonably contracted by him for the performance of the contract, all if and in so far as the Court deems it just to do so in the circumstances of the case.

¹³ In the case of a frustrated contract it may sometimes be difficult to determine which party is to be regarded as the innocent party and which as the party in default. The provisions of Article 580 of the Mejelle (The Ottoman Civil Code) illustrate the problem: “If a person employs reapers to reap crops in his field for a certain sum of money, and after such reapers have reaped a portion thereof, the rest is destroyed by a fall of hail or by some other accident, the reapers are entitled to a share of the fixed wage proportionate to the quantity reaped, but not to the balance”. (The Civil Laws of Palestine and Trans-Jordan (1933, trans, by Hooper) vol. 1, p. 132). The uncertainty in the above illustration is whether the hired workers breached their undertaking to reap the whole crop, or whether the owner of the field breached his undertaking that the crops would remain in his field until reaped. It is not clear why Article 580 was not repealed—neither by the Remedies Law nor by the Contracts (General Part) Law. On this article see Friedmann, , Unjust Enrichment (Avukah, Tel-Aviv, 1970, in Hebrew) §§105, 108Google Scholar; Cf. Taylor v. Caldwell (1863) 3 B. & S., 826; 122 Eng. Rep. 309.

¹⁴ Although sec. 18(b) gives the Court the discretion to require restitution to be made “whether or not the contract has been rescinded”, it does seem that the court, notwithstanding the language of the provision, is bound to order restitution when the injured party has exercised the right to rescind as provided in sub-sec.(a), since otherwise the remedy given to the injured party would be meaningless. See, however, the opinion expressed by Yadin, op. cit. supra n. 8 at p. 131.

¹⁵ Cf. Hoenig v. Isaacs [1952] 2 All E.R. 176 at p. 179 per Somervell L.J., at p. 182 per Romer L.J.; Dakin H. & Co. Ltd. v. Lee [1916] 1 K.B. 566 at p. 570, and at pp. 579–580 per Lord Chosens-Hardy M. R.; Kiely & Sons Ltd. v. Medcraft (1965) 109 Sol. J. 829, per Willmer L.J.; Shachor v. Vita (1951–2) 6 P.E. 393 at pp. 396–397 per Cheshin J.; “Bat Galim” Beach Enterprises Ltd. v. “Casino” Entertainments Ltd. (1960) 23 P.M. 201, at p. 207 per Vinogradov J.

¹⁶ See Yadin, op. cit. at p. 54 ff.

¹⁷ This raises, however, a possible difficulty. If imperfect but substantial performance is considered as sufficient, this may mean that such performance will entail no breach of the contract conferring on the other party a right to damages. Such result is, obviously, unsatisfactory and unlikely to be adopted.

¹⁸ Cf. Corbin, , “Conditions in the Law of Contract” (1919) 28 Yale L.J. 739, 759Google Scholar reprinted in Selected Readings of the Law of Contracts (1931) 871, 888.

¹⁹ See Boston Deep Sea Fishing & Ice Co. v. Arisell (1888) 39 Ch. D. 339 to which example (3) is analogous; see also Pines of Islip, Inc. v. Island Concrete Cork, 22 Misc. Rep. 2d. 871, 196 N.Y.S. 2d. 252, 254 (Sup. Ct. 1959); Sumpter v. Hedges [1898] 1 Q.B. 673 and Goff and Jones, 327–330, 351.

²⁰ See supra n. 3.

²¹ Boston Deep Sea Fishing & Ice Co. v. Ansell, supra n. 19, at pp. 364–365; cf. Moriarty v. Regent's Garage and Engineering [1921] 2 K.B. 266 (G.A.); Morison, , Rescission of Contracts (1916) 16.Google Scholar

²² Any benefit derived under the contract will obviously be set off against damages claimed from the party in breach.

²³ See Boston Deep Sea Fishing & Ice Co. v. Ansell, supra n. 19.

²⁴ Cf. Ballantine, , “Forfeiture for Breach of Contract” (1920–1921) 5 Minn. L.R. 329 at 352.Google Scholar

²⁵ Save in circumstances of frustration when the Court, as already mentioned, is authorized to order restitution although the contract has not been rescinded.

²⁶ See supra n. 9 and authorities there cited. Upon the injured party's resort to one of the remedies prescribed in sec. 2 of the Remedies Law, the party in breach will in any event obtain satisfaction. Although if the injured party claims enforcement, the party in breach will not obtain anything until he completes performance, save if the Court makes enforcement conditional on the fulfilment of the obligations of the injured party as provided in sec. 4 of the Remedies Law. However, we are not of the opinion that the mere occurrence of a breach, obliges the injured party to resort to one of the remedies available to him; the remedies are at his disposal, but he is not constrained to avail himself of them.

²⁷ Even if the student had failed in the examination, it would be questionable whether the teacher could still complete performance of his obligation. It seems that preparing the student towards entrance examinations due to be held at a later date, does not amount to fulfilment of the teacher's obligation under the contract, for it is not what the parties bargained for.

²⁸ Cf. Bolton v. Mahadeva [1972] 2 All E.R. 1322, at 1328, per Sachs L.J.

²⁹ The borderline between inability not amounting to frustration and “exemption by reason of constraint or frustration of contract” within the meaning of sec. 18 of the Law, may sometimes be very thin. For instance, in example (1) the teacher's journey may have been undertaken for medical reasons, but the student might then argue that such medical treatment was available in Israel and that the contract was therefore capable of being performed.

³⁰ See e.g. Yadin, op. cit. at pp. 13–14; Ballantine, loc. cit.

³¹ Such a clause often comes into operation after termination of the contract, but this is not necessarily so. It is conceivable that the parties would provide for damages (or penalty) to be paid or an advance forfeited following a certain breach of the contract, e.g., delay in performance, and that such a provision would apply even though the contract is not terminated.

³² Knist v. Bucklow Motroy Ltd., [1926] 4 D.L.R. 1111, 1112.

³³ In this connection see the example, mentioned at the beginning of this article, of the singer who lost her voice.

³⁴ Cf. Goff, , “Reform of the Law of Restitution” (1961) 24 Mod. L.R. 85, 85–6.CrossRefGoogle Scholar

³⁵ As regards the provisions of this Law which may have a bearing on the subject see supra n. 9.

³⁶ §357.

³⁷ See Oxendale v. Wetherell (1829) 9 B. & C. 386; 109 Eng. Rep. 143, and supra n. 4.

³⁸ See Sale of Goods Act, 1893 (56 & 57 Viet. C. 71), sec. 30(1).

³⁹ See Uniform Sales Act S. 44(1); Uniform Commercial Code §2–178.

⁴⁰ In this respect the English statutory arrangement departs from the common law on the subject, which provided that payment be made according to the value of the goods and not according to the contract price. The American legislation usually follows the common law arrangement.

⁴¹ 22 L.S.I. 107. For an interpretation of the Sale Law, see Zeltner's monograph in the collection of Commentaries on the Contracts Law, op. cit. supra n. 8. See also Aronovsky, , “Comments on the New Law of Sales” (1969) 4 Is.L.R. 141.Google Scholar

⁴² This appears from the language of sec. 28: “Where the seller has infringed an obligation referred to in sec. 11 and has not remedied the infringement within a reasonable time after the buyer gave him notice thereof…” The matter is more explicitly stated in Article 3 of the Uniform Law on the International Sale of Goods (see infra n. 44), which is annexed to the local Sale (International Sale of Goods) Law, 1971.

⁴³ Sec. 14 of the Sale Law provides that, if the buyer has failed to give the seller notice of non-conformity, he is precluded from relying thereon. Is he, then, liable for the full price?

⁴⁴ This Law forms an annex to the “Convention relating to a Uniform Law on the International Sale of Goods” signed at The Hague on July 1, 1964, to which Israel was a signatory. The Uniform Law has been given the force of law by virtue of sec. 2 of the Sale (International Sale of Goods) Law, 1971, (25 L.S.I. 32) and in the Regulations (1973) K.T. no. 2970, p. 786, which gave notice of the effectiveness of such law retroactive to Aug. 18, 1972.

⁴⁵ Sale Law Bill (1965) H.H. no. 660, p. 276.Google Scholar See also sec. 22 of the Sale Law.

⁴⁶ Contracts Law (Remedies for Breach of Contract) Bill, (1969) H.H. no. 857 p. 396.Google Scholar

⁴⁷ On this Article which maintains Ottoman Law in Mandated Palestine, while opening the door to gradual reception of Engish law, see Ginossar, , “Israel Law: Components and Trends” (1966) 1 Is.L.R. 380Google Scholar and Shalev, G., “General Comments on Contracts (General Part) Law, 1973” (1974) 9 Is.L.R. 274 at 275.Google Scholar

⁴⁸ For an attempt to limit the effect of sec. 24 and similar provisions in Israel legislation dealing with autarky of the law, see Friedmann, , “The Provision Regarding Autarky of the Law and the Problem of Lacunae in Modern Israeli Legislation” (1972) 3 Mishpatim 91Google Scholar but see also, Barak, Comment on “The Provision Regarding Autarky of the Law and the Problem of Lacunae in Modern Israeli Legislation”, ibid., at p. 99. See also Zeltner, op. cit. at pp. 11–14 who expresses the opinion that no recourse to English common law can be had in order to fill gaps in the Sale Law.

⁴⁹ On this aspect see the exchange of views between Williston and Laube in (1935–6) 84 U. of Pa. L. R. 68 et seq.

⁵⁰ For an interpretation of this statement of the law see Corbin on Contracts (1964) vol. 5A §1123; cf. the criticism of Laube, op. cit.

⁵¹ This term points to a situation where, although the obstacle for further performance does not amount to impossibility, yet compelling the defaulting party to complete performance will impose unjust hardship on him while conferring no substantial benefit upon the other party. This term is flexible and should be subject to the court's discretion. It should, however, be applied only in exceptional situations.

⁵² See supra p. 361 ff.

⁵³ Cf. the statements of Diplock, Lord in Robiphone Facilities v. Blank [1966] 1 W.L.R. 1428Google Scholar, 1446 who describes exemption clauses as “penalty clauses in reverse”.

⁵⁴ See text supra at n. 14.

⁵⁵ Lawrence v. Miller 86 N.Y. 131, 139 (1881) per Folger C.J. “A party cannot sustain an action … on his own breach of his own contract”.

⁵⁶ Cf. the reasoning of Lord Thankerton in Ramsdon v. David Sharratt & Sons Ltd. [1930] Comm. Case 314, 323.