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Frustration of Contract
Interloper
post Fri, 25 Jan 2019 - 16:36
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My niece had an appointment in town and parked in a car park operated by Euro Car Parks, where she had parked on many previous occasions. She intended to buy a 1-hour parking ticket.

My niece is a member of the cashless society and doesn't carry any money. She always pays for her parking with her NFC debit card. On this occasion, neither of the two ticket machines was working correctly and neither machine would accept a card payment. Several other people were experiencing the same problem of not being able to pay for their parking.

There wasn't time before her appointment for my niece to resolve the problem, so she left a note on her dashboard to explain why she hadn't purchased a ticket. Unfortunately, it was a ANPR car park, so there was no one there to read her note.

After her appointment, my niece walked into town and found an ATM where she withdrew a £10 note. She then went into a shop and bought something she didn't need in order to get some change (the shop wouldn't give her any change unless she purchased something). Then she returned to the car park and bought the 1-hour ticket she had originally intended to buy, before leaving.

This event took place on 6 December 2018 and the date is significant. This was the day that the O2 network went down at around 05:00hrs., along with all systems and subsystems using the O2/Ericsson services. The fault caused widespread disruption and was the reason why the parking machines were not taking card payments.

I believe this is known as 'Frustration of Contract due to Equipment Failure'.

My niece has appealed the parking charge to Euro Car Parks and has just had her appeal rejected. The grounds for rejection are that her total stay in the car park exceeded 1-hour, which it did by 46 minutes. However, my niece argues that it wasn't her fault that she couldn't buy a ticket on arrival and that it took time after her appointment for her to visit the bank and shop in order to get the cash to buy a ticket.

I assume that had she purchased a 2-hour ticket, there would not be an issue, but unfortunately she didn't. In fact, she admits she didn't really consider the time, she was just determined to buy the 1-hour ticket as originally intended and get home.

I'm wondering what the legal position is now and what the legal position would have been had my niece simply accepted that the ticket machines were both faulty (which they were) and left after her appointment without making any payment.

At the moment Euro Car Parks want £50. If my niece appeals to POPLA and loses, she has to pay £85 (presumably a £35 deterrent to discourage victims from risking an appeal).

Euro Car Parks also mention the Ombudsman Services (www.ombudsman-services.org) stating that they "would be competent to deal with the appeal." Euro Car Parks then go on to say "...we have not chosen to participate in their (the Ombudsman's) alternative dispute resolution service," before stating that an appeal can therefore only be made to POPLA.

TIA
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post Fri, 25 Jan 2019 - 16:36
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cabbyman
post Fri, 25 Jan 2019 - 20:33
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ECP use POPLA. Not a problem.

You seem to indicate that your niece told the narrative, identifying herself as driver? Yes or No?


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Interloper
post Fri, 25 Jan 2019 - 21:15
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QUOTE (cabbyman @ Fri, 25 Jan 2019 - 20:33) *
ECP use POPLA. Not a problem.


My niece has been given a 10-digit POPLA code by ECP.

QUOTE
You seem to indicate that your niece told the narrative, identifying herself as driver? Yes or No?


Yes, my niece did confirm that she was the driver.

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nosferatu1001
post Sun, 27 Jan 2019 - 13:24
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Appeal to popla
Cite frustration of contract - payment was made as soon as possible, as the OPERATORS machines were unable to take card payment due to a fault with their network.
Every attempt was made, the operator was at fault
No charge was ever possible as their machines had a fault
The appeal must be upheld.
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Glacier2
post Sun, 27 Jan 2019 - 16:33
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You are assuming that POPLA know what Frustration is. Many of their assessors are very bad on such legal points of law.
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cabbyman
post Sun, 27 Jan 2019 - 17:02
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It still needs pleading. We may yet educate them!


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southpaw82
post Sun, 27 Jan 2019 - 18:26
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How is it frustration if the driver was able to pay, just not by their preferred method? If there was frustration, it seems that the frustrating event was the driver not having a suitable means to pay rather then the card machine not working. There may also be issues around the driver knowing that they had not paid but continuing to take a benefit anyway. Equally, it seems the driver didn’t pay for what they received (i.e. 2 hours parking) so in that respect there was a breach.


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The Rookie
post Mon, 28 Jan 2019 - 08:55
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Agreed, she would have had a much stronger argument had she paid for the 2 hours used.


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HappyHarry
post Mon, 28 Jan 2019 - 09:55
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Sir Greg Knight, MP gave non-working machines as an example of a perfect defence in the House of Commons debate, but as his bill isn’t finalised yet that’s not much help. Can Niece not appeal on several other grounds like authority to manage the car park, issue charges, Landowner authority, Signage, etc?

“... if there is only one machine or all the machines are out of order, that ought to be a perfect defence. The company operating the car park has in effect invited the motorist on to the car park to park the car on payment of a fee, and if it is not going to facilitate payment, it should not be able to extract a penalty.” Sir Greg Knight, MP


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“Nobody leaves their house because they want to go and do some parking; parking is simply a means to an end, and it should be as easy as possible.” Rishi Sunak, MP
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Churchmouse
post Mon, 28 Jan 2019 - 10:58
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QUOTE (southpaw82 @ Sun, 27 Jan 2019 - 18:26) *
How is it frustration if the driver was able to pay, just not by their preferred method? If there was frustration, it seems that the frustrating event was the driver not having a suitable means to pay rather then the card machine not working. There may also be issues around the driver knowing that they had not paid but continuing to take a benefit anyway. Equally, it seems the driver didn’t pay for what they received (i.e. 2 hours parking) so in that respect there was a breach.

Frustration of contract also requires that the reason for the impossibility of performance of the contract is not due to the fault of either of the parties. The unavailability of one of the specified means of payment could constitute a breach of contract--by the offeror--rather than a fault-free "frustration" of the contract which excused its further performance by either party.

I would argue that the PPC breached the contract, subsequent to its formation, when it failed to provide one of the means of payment it had offered to the motorist in exchange for the motorist's promise to pay. If a contractual offer unambiguously provides that payment may be made by more than one means, the offeree can accept the offer based on an intention of utilising any of those payment methods. If a parking contract is accepted by promising to pay (rather than by payment itself), then the unavailability of one of the methods would arise only after the formation of the contract. This is also the case with the frustration of contract doctrine, but I'm not convinced that it would apply in this situation.

Whether such a contract would be considered "frustrated" would depend on whether a court would agree that the lack of availability of one of the specified means of payment was "radically different" from what had been agreed. In today's increasingly cashless society, more and more people do not carrry cash and have no way of easily obtaining it (assuming the time for payment specified in the contract allowed sufficient time for the seeking of alternative means of payment to occur), so they very well may consider the unexpected unavailability of one of the specified means of payment to be radically different to what they had agreed to do when they accepted the offer. For different reasons, many people do not use, or do not wish to use, mobile payment services and prefer to use cash for things like parking fees. (For example, I do not trust such systems because they often do not provide receipts or any durable way of verifying that the transaction has been successful or not.) Accordingly, such persons simply would not have accepted any offer requiring them to pay by an impractical or impossible means. However, it would be up to a court to decide, and I think the breach of contract argument is stronger.

In any case, when a benefit of a breached or frustrated service contract is unjustly accepted, the remedy is restitution for unjust enrichment (quantum meruit), rather than the fantasy contractual "penalty" the offeror would probably prefer. As the PPC has already been paid for the parking (more or less), there is no basis for any claim worth bringing to court.

--Churchmouse
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southpaw82
post Mon, 28 Jan 2019 - 12:11
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QUOTE (HappyHarry @ Mon, 28 Jan 2019 - 09:55) *
Sir Greg Knight, MP gave non-working machines as an example of a perfect defence in the House of Commons debate, but as his bill isn’t finalised yet that’s not much help. Can Niece not appeal on several other grounds like authority to manage the car park, issue charges, Landowner authority, Signage, etc?

“... if there is only one machine or all the machines are out of order, that ought to be a perfect defence. The company operating the car park has in effect invited the motorist on to the car park to park the car on payment of a fee, and if it is not going to facilitate payment, it should not be able to extract a penalty.” Sir Greg Knight, MP

However, it seems that the machines were only partially out of order - they would still accept cash.

QUOTE (Churchmouse @ Mon, 28 Jan 2019 - 10:58) *
I would argue that the PPC breached the contract, subsequent to its formation, when it failed to provide one of the means of payment it had offered to the motorist in exchange for the motorist's promise to pay.


That would require a court to find that accepting payment by card to be a term of the contract, breach of which is breach of a fundamental term. That’s a bit of a stretch. It’s more likely that a court would find that payment was a term and, at best, the offeror had to have some means of accepting payment.

QUOTE
In any case, when a benefit of a breached or frustrated service contract is unjustly accepted, the remedy is restitution for unjust enrichment (quantum meruit), rather than the fantasy contractual "penalty" the offeror would probably prefer. As the PPC has already been paid for the parking (more or less), there is no basis for any claim worth bringing to court.

That presupposes that there was a contract and it was frustrated.


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Glacier2
post Mon, 28 Jan 2019 - 12:36
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If the machines were indeed out of order but other methods of payment were available such as pay by text or phone frustration is not a valid argument.
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Interloper
post Mon, 28 Jan 2019 - 20:31
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QUOTE (nosferatu1001 @ Sun, 27 Jan 2019 - 13:24) *
Appeal to popla
Cite frustration of contract - payment was made as soon as possible, as the OPERATORS machines were unable to take card payment due to a fault with their network.
Every attempt was made, the operator was at fault
No charge was ever possible as their machines had a fault.


Certainly that is all true.

As equipment failure meant that my (cashless) niece was unable to pay on arrival, presumably no parking contract was initially in place and this remained the case until she actually returned some time later with cash to buy a ticket?

Had my niece thought to pay for 2-hours parking when she finally managed to obtain some cash, she would certainly appeal to POPLA. She remains undecided on the best course of action now, because of the alleged 46 minutes overstay, but she claims that the overstay was a consequence of the time taken to resolve the payment problems and that an hour's parking covered her own requirements.

QUOTE
The appeal must be upheld.


This is a difficult one to call.

I have no experience of the various appeal bodies. Are the decisions taken by humans or algorithms?

Maybe POPLA is fair and impartial - I don't know.

I think the amount being demanded (£85 if my niece appeals to POPLA and loses) is excessive in the circumstances, especially as the whole incident stems solely from the failure of Euro Car Park's own equipment.

Potentially the only credible loss to ECP is the £1 parking fee relating to the contentious 46 minute overstay period.

I notice that O2 are offering compensation to customers who suffered a loss as a consequence of their network outage. Perhaps Euro Car Parks should be putting in a claim?

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southpaw82
post Mon, 28 Jan 2019 - 20:37
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QUOTE (Interloper @ Mon, 28 Jan 2019 - 20:31) *
As equipment failure meant that my (cashless) niece was unable to pay on arrival, presumably no parking contract was initially in place and this remained the case until she actually returned some time later with cash to buy a ticket?

How do you figure that out? What makes you think a contract is only formed when she pays?


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Interloper
post Mon, 28 Jan 2019 - 20:46
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QUOTE (Glacier2 @ Mon, 28 Jan 2019 - 12:36) *
If the machines were indeed out of order but other methods of payment were available such as pay by text or phone frustration is not a valid argument.


The only means of paying for the parking ticket is by cash or card.

There are two ticket machines and at the time neither had a working card payment system. At least one of the ticket machines remained able to accept cash. My niece didn't have any cash; only her debit card.

My niece has used this car park dozens of times in the past and has always paid by card with no issues.

I shall be suggesting to my niece that in future she keeps a small bag of £1 coins in her car!

QUOTE (southpaw82 @ Mon, 28 Jan 2019 - 20:37) *
How do you figure that out? What makes you think a contract is only formed when she pays?


You didn't spot the question mark then?

Have you considered changing your sobriquet to devil's advocate?
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southpaw82
post Mon, 28 Jan 2019 - 20:56
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QUOTE (Interloper @ Mon, 28 Jan 2019 - 20:46) *
Have you considered changing your sobriquet to devil's advocate?

I find clients tend to prefer finding out the weaknesses of their case in my office rather than in court. It tends to apply here too.


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Interloper
post Mon, 28 Jan 2019 - 21:06
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QUOTE (Churchmouse @ Mon, 28 Jan 2019 - 10:58) *
Frustration of contract also requires that the reason for the impossibility of performance of the contract is not due to the fault of either of the parties. The unavailability of one of the specified means of payment could constitute a breach of contract--by the offeror--rather than a fault-free "frustration" of the contract which excused its further performance by either party.


On the face of it, the "impossibility of performance of the contract" was not directly due to the fault of either the offeror or the offeree.

The "impossibility of performance of the contract" was a consequence of the offeror's network provider, O2/Ericsson, suffering a widespread network outage due to "faulty software."
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southpaw82
post Mon, 28 Jan 2019 - 21:15
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How was it impossible if she did in fact pay? Albeit not by her preferred method.

If the POPLA adjudicators are as poor as people say they might go for it.

This post has been edited by southpaw82: Mon, 28 Jan 2019 - 21:17


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Churchmouse
post Mon, 28 Jan 2019 - 21:59
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First, an appeal to POPLA is almost a free shot, as their decision is only binding on the PPC. POPLA is not as useful as it has been in the past, as it now views itself as having no purpose other than to decide if a PCN was "properly issued", rather than legally enforceable. But if paying at the "discounted rate" is more important than winning on the merits, then by all means, pay it now. Surrender will never be cheaper than that.

QUOTE (southpaw82 @ Mon, 28 Jan 2019 - 12:11) *
QUOTE (Churchmouse @ Mon, 28 Jan 2019 - 10:58) *
I would argue that the PPC breached the contract, subsequent to its formation, when it failed to provide one of the means of payment it had offered to the motorist in exchange for the motorist's promise to pay.


That would require a court to find that accepting payment by card to be a term of the contract, breach of which is breach of a fundamental term. That’s a bit of a stretch. It’s more likely that a court would find that payment was a term and, at best, the offeror had to have some means of accepting payment.

It may help if we knew what the terms of the offer actually were, but yes, a court would have to agree that the form of payment was a fundamental term.

...

It appears that I have somehow failed to appreciate that the failure of the O2 network was the reason for the unavailability of the card payment facility... In that case, it does now seem more like there was the formation of a contract, followed by the frustration of the contract (rather than a breach by the PPC). The whole purpose of the development of the frustration of contract doctrine in English law was to eliminate the "strict liability" aspect from contract law, by allowing contracts to be avoided when their performance is demonstrably impossible(*)--and through no fault of the parties. But this defence would still depend on a court agreeing that payment by card was a fundamental term. Can we see the signage, please?

(*) Impossible within the terms of the contract, i.e., within the 10 minute grace period, for example.

--Churchmouse
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southpaw82
post Mon, 28 Jan 2019 - 22:31
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QUOTE (Churchmouse @ Mon, 28 Jan 2019 - 21:59) *
it does now seem more like there was the formation of a contract, followed by the frustration of the contract

Contract - parking in return for payment. Parking was obtained, payment was given (in cash, though apparently deficient in amount). Where is the frustration?

Consider:

QUOTE
So perhaps it would be simpler to say at the outset that frustration occurs whenever the law recognises that without default of either party a contractual obligation has become incapable of being performed because the circumstances in which performance is called for would render it a thing radically different from that which was undertaken by the contract. Non haec in foedera veni. It was not this that I promised to do.


QUOTE
The question is whether the contract which they did make is, on its true construction, wide enough to apply to the new situation: if it is not, then it is at an end.


Both from Davis Contractors Ltd v Fareham Urban District Council.

If there are machines present that accept cash or card then surely, on any proper construction and absent an express term to the contrary, payment is contemplated by either means such that one being unavailable doesn’t mean that the contract is of a different type.

To put it in a different context, does anyone actually believe that if I was to fill my car up at a petrol station and when I go to pay the card machine isn’t working I can just say “ah well, contract frustrated, NVM”?




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