Total Failure of Consideration

Abstract

Failure of consideration can be either total or partial. In this paper the author examines the doctrine of accrued rights and the role it plays in relation to total failure of consideration in the contractual context. The doctrine of accrued rights is well established in Australian contract law. Rights that accrue prior to termination of a contract survive termination and can therefore be enforced after termination. The author argues that when there is a total failure of consideration the doctrine of accrued rights operates to create a debt for the amount that is the subject of the total failure of consideration. The obligation to pay the debt arises within the law of contract. This conclusion will be contrasted with those who argue that an action for recovery, and the corresponding obligation to make payment, are independent of contract.