Acts and Regulations

2011, c.164 - Frustrated Contracts Act

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Current to 1 January 2024
2011, c.164
Frustrated Contracts Act
Deposited May 13, 2011
Definitions
1The following definitions apply in this Act.
“contract” includes a contract to which the Crown is a party.(contrat)
“court” means the court or arbitrator by or before whom a matter falls to be determined.(tribunal)
“discharged” means relieved from further performance of the contract.(libéré)
R.S.1973, c.F-24, s.1
Application
2(1)This Act applies to any contract governed by the law of the Province, whether made before or after the commencement of this Act, that on or after April 28, 1951, has become impossible of performance or been otherwise frustrated, and the parties who for that reason have been discharged.
2(2)This Act does not apply to
(a) a charter party or a contract for the carriage of goods by sea, except a time charter party or a charter party by way of demise,
(b) a contract of insurance, or
(c) a contract for the sale of specific goods if, without the knowledge of the seller, the goods have perished at the time when the contract is made, or if, without any fault on the part of the seller or buyer, the goods perish before the risk passes to the buyer.
R.S.1973, c.F-24, s.2
Adjustment of frustrated contract
3The sums paid or payable to a party under a contract before the parties were discharged,
(a) in the case of sums paid, are recoverable from the party as money received by the party for the use of the party by whom the sums were paid, and
(b) in the case of sums payable, cease to be payable.
R.S.1973, c.F-24, ss.3(1)
Recovery of expenses
4If, before the parties were discharged, the party to whom the sums were paid or payable incurred expenses in connection with the performance of the contract, the court, if it considers it just to do so having regard to all the circumstances, may allow the party to retain or to recover, as the case may be, the whole or any part of the sums paid or payable not exceeding the amount of the expenses, and without restricting the generality of the foregoing, the court, in estimating the amount of the expenses, may include such sum as appears to be reasonable in respect of overhead expenses and in respect of any work or services performed personally by the party incurring the expenses.
R.S.1973, c.F-24, ss.3(2)
Recovery of benefits
5(1)If, before the parties were discharged, any of them has, by reason of anything done by any other party in connection with the performance of the contract, obtained a valuable benefit other than a payment of money, the court, if it considers it just to do so having regard to all the circumstances, may allow the other party to recover from the party benefited the whole or any part of the value of the benefit.
5(2)If a party has assumed an obligation under the contract in consideration of the conferring of a benefit by any other party to the contract on any other person, whether a party to the contract or not, the court, if it considers it just to do so having regard to all the circumstances, may for the purposes of subsection (1) treat any benefit so conferred as a benefit obtained by the party who has assumed the obligation.
R.S.1973, c.F-24, ss.3(3), (4)
Adjustments of insurance
6In considering whether any sum ought to be recovered or retained under sections 3 to 8 by a party to the contract, the court shall not take into account any sum that, by reason of the circumstances giving rise to the frustration of the contract, has become payable to that party under any contract of insurance unless there was an obligation to insure imposed by an express term of the frustrated contract or by or under any enactment.
R.S.1973, c.F-24, ss.3(5)
Effect of special terms
7If the contract contains a provision that, on the true construction of the contract, is intended to have effect in the event of circumstances that operate, or but for the provision would operate, to frustrate the contract, or is intended to have effect whether those circumstances arise or not, the court shall give effect to the provision and shall give effect to sections 3 to 8 only to such extent, if any, as appears to the court to be consistent with the provision.
R.S.1973, c.F-24, ss.3(6)
Severability of frustrated contract
8If it appears to the court that a part of the contract can be severed properly from the remainder of the contract, that part being wholly performed before the parties were discharged, or so performed except for the payment in respect of that part of the contract of sums that are or can be ascertained under the contract, the court shall treat that part of the contract as if it were a separate contract that has not been frustrated and shall treat sections 3 to 8 as applicable only to the remainder of the contract.
R.S.1973, c.F-24, ss.3(7)
N.B. This Act was proclaimed and came into force September 1, 2011.
N.B. This Act is consolidated to September 1, 2011.