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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.

© 1947 Crown Copyright

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