Contract Law · claim

Elements of Failure Of Consideration

Quick Answer

What are the elements of Failure Of Consideration?

Failure of consideration is a legal doctrine that arises when a promise is made but not fulfilled, resulting in no valid benefit or value being exchanged. This principle can serve as a basis for a claim in contract disputes where the expected consideration fails to materialize.

Required Elements

1. Existence of a Contract

There must be a valid and enforceable contract between the parties.

What to prove: It must be shown that a contract existed and that both parties were bound by its terms.

2. Failure to Provide Consideration

One party must have failed to deliver their promised consideration under the contract.

What to prove: There needs to be proof that the promised benefits or aggrandizement did not materialize or were not provided as agreed.

3. Damages Resulting from the Failure

The party claiming failure of consideration must demonstrate that they suffered damages due to this failure.

What to prove: Evidence must be shown that the lack of consideration caused a loss or detriment to the claiming party.

Burden of Proof

The burden of proof lies with the party asserting the failure of consideration, typically requiring a preponderance of the evidence standard in civil cases.

Available Defenses
  • Full performance by the defending party
  • Mutual mistake regarding the facts of consideration
Common Fact Patterns
  • A service provider completes their work but the client fails to pay, claiming inadequate services.
  • A buyer pays for goods that the seller subsequently fails to deliver.
Exam Tip

Focus on the elements of contract formation and the implications of an unmet consideration. Be prepared to analyze fact patterns where the underlying agreement may be called into question.

Key Cases
  • Pym v. Campbell
  • Cloverdale Equipment Co. v. O'Hara
  • Hoffman v. Red Owl Stores, Inc.

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