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FRUSTRATED CONTRACTS ACT (NORTHERN IRELAND) 1947

FRUSTRATED CONTRACTS ACT (NORTHERN IRELAND) 1947 - LONG TITLE

An Act to amend the law relating to the frustration of contracts.
[6th March 1947]
Adjustment of rights and liabilities of parties to frustrated
contracts.

FRUSTRATED CONTRACTS ACT (NORTHERN IRELAND) 1947 - SECT 1

1.(1) Where a contract has become impossible of performance or been
otherwise frustrated, and the parties thereto have for that reason
been discharged from the further performance of the contract, the
following provisions of this section shall, subject to the provisions
of section two of this Act, have effect in relation thereto.

(2) All sums paid or payable to any party in pursuance of the
contract before the time when the parties were so discharged (in
this Act referred to as "the time of discharge") shall, in the
case of sums so paid, be recoverable from him as money received by
him for the use of the party by whom the sums were paid, and, in
the case of sums so payable, cease to be so payable:

Provided that, if the party to whom the sums were so paid or
payable incurred expenses before the time of discharge in, or for
the purpose of, the performance of the contract, the court may, if
it considers it just to do so having regard to all the
circumstances of the case, allow him to retain or, as the case may
be, recover the whole or any part of the sums so paid or payable,
not being an amount in excess of the expenses so incurred.

(3) Where any party to the contract has, by reason of anything
done by any other party thereto in, or for the purpose of, the
performance of the contract, obtained a valuable benefit (other than
a payment of money to which the last foregoing sub-section applies)
before the time of discharge, there shall be recoverable from him
by the said other party such sum (if any), not exceeding the value
of the said benefit to the party obtaining it, as the court
considers just, having regard to all the circumstances of the case
and, in particular,

(a)the amount of any expenses incurred before the time of discharge
by the benefited party in, or for the purpose of, the performance
of the contract, including any sums paid or payable by him to any
other party in pursuance of the contract and retained or recoverable
by that party under the last foregoing sub-section, and

(b)the effect, in relation to the said benefit, of the circumstances
giving rise to the frustration of the contract.

(4) In estimating, for the purposes of the foregoing provisions of
this section, the amount of any expenses incurred by any party to
the contract, the court may, without prejudice to the generality of
the said provisions, 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 said party.

(5) In considering whether any sum ought to be recovered or
retained under the foregoing provisions of this section by any party
to the contract, the court shall not take into account any sums
which have, by reason of the circumstances giving rise to the
frustration of the contract, 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.

(6) Where any person has assumed obligations under the contract in
consideration of the conferring of a benefit by any other party to
the contract upon any other person, whether a party to the contract
or not, the court may, if in all the circumstances of the case it
considers it just to do so, treat for the purposes of sub-section
(3) of this section any benefit so conferred as a benefit obtained
by the person who has assumed the obligations as aforesaid.

FRUSTRATED CONTRACTS ACT (NORTHERN IRELAND) 1947 - SECT 2
Provisions as to application of this Act.

2.(1) This Act shall apply to contracts, whether made before or
after the commencement of this Act, as respects which the time of
discharge is on or after the first day of March, nineteen hundred
and forty-seven, but not to contracts as respect which the time of
discharge is before the said date.

(2) Contracts to which a Ministry of Northern Ireland is a party
shall not for that reason be excluded from the operation of this
Act.

(3) Where any contract to which this Act applies contains any
provision which, upon the true construction of the contract, is
intended to have effect in the event of circumstances arising which
operate, or would but for the said provision operate, to frustrate
the contract, or is intended to have effect whether such
circumstances arise or not, the court shall give effect to the said
provision and shall only give effect to the foregoing section of
this Act to such extent, if any, as appears to the court to be
consistent with the said provision.

(4) Where it appears to the court that a part of any contract to
which this Act applies can properly be severed from the remainder
of the contract, being a part wholly performed before the time of
discharge, or so performed except for the payment in respect of
that part of the contract of sums which are or can be ascertained
under the contract, the court shall treat that part of the contract
as if it were a separate contract and had not been frustrated and
shall treat the foregoing section of this Act as only applicable to
the remainder of that contract.

(5) This Act shall not apply

(a)to any voyage charterparty, or to any contract (other than a
charterparty) for the carriage of goods by sea; or

(b)to any contract of insurance, save as is provided by sub-section
(5) of the foregoing section; or

(c)to any contract to which [section 7 of the Sale of Goods Act,
1979] (which avoids contracts for the sale of specific goods which
perish before the risk has passed to the buyer) applies, or to any
other contract for the sale, or for the sale and delivery, of
specific goods, where the contract is frustrated by reason of the
fact that the goods have perished.

FRUSTRATED CONTRACTS ACT (NORTHERN IRELAND) 1947 - SECT 3
Short title and interpretation.

3.(1) This Act may be cited as the Frustrated Contracts Act
(Northern Ireland), 1947.

(2) In this Act the expression "court" means, in relation to any
matter, the court or arbitrator by or before whom the matter falls
to be determined.