Frustrated Contracts Act

Consolidated act

Citation: R.S.N.W.T. 1988, c.F-12
Source: Unofficial consolidation PDF (justice.gov.nt.ca)

This is an unofficial reading copy parsed from the Department of Justice consolidation PDF above — itself an office consolidation, not an official statement of the law. The authoritative text is in the Revised Statutes of the Northwest Territories, 1988 and the annual Statutes volumes.

Cites

None.

Cited by

Acts
Residential Tenancies Act, s.7

Contents

1. Definitions 2. Application 3. Where money paid before discharge 4. Expenses 5. Benefits 6. Insurance 7. Special provisions 8. Where

Definitions

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 is to be determined; (tribunal)

"discharged" means relieved from further performance of a contract. (libéré)

Application

(1) This Act applies to a contract governed by the law of the Territories where the parties are discharged because the contract has become impossible to perform or has been otherwise frustrated.

Exception

(2) This Act does not apply to

(a) a charterparty or a contract for the carriage of goods by sea, other than a time charterparty or a charterparty by way of demise;

(b) a contract of insurance; or

(i) without the knowledge of the seller, have perished at the time when the contract is made, or

(ii) without fault on the part of the seller or buyer, perish before the risk passes to the buyer.

Where money paid before discharge

(1) Money paid to a party under a contract before the parties were discharged is recoverable from that party as money received by him or her for the use of the other party.

Where money payable before discharge

(2) Money payable to a party under a contract before the parties were discharged ceases to be payable.

Expenses

(1) If, before the parties were discharged, the party to whom money was paid or payable under the contract incurred expenses in connection with the performance of the contract, the court, if it considers it just having regard to all the circumstances, may allow that party to retain or to recover the whole or part of that money, not exceeding the amount of the expenses.

Calculation of expenses

(2) In determining the amount of the expenses referred to in subsection (1), the court may include a reasonable sum in respect of overhead expenses or work or services performed personally by the party incurring the expenses.

Benefits

(1) If, before the parties were discharged, a party has obtained a valuable benefit other than a payment of money by reason of anything done by another party in connection with the performance of the contract, the court, if it considers it just having regard to all the circumstances, may allow the other party to recover from the party benefited the whole or part of the value of the benefit.

Assumed obligations

(2) Where a party has assumed an obligation under the contract in consideration of another party conferring a benefit on another person, whether or not a party to the contract, the court, if it considers it just having regard to all the circumstances, may treat the benefit conferred as a benefit obtained by the party who has assumed the obligation, for the purposes of subsection (1).

Insurance

In determining whether money ought to be recovered or retained under this Act by a party, the court shall not take into account money that, by reason of the circumstances giving rise to the frustration of the contract, has become payable to that party under a contract of insurance unless an obligation to insure was expressly imposed by the frustrated contract or by or under an enactment.

Special provisions

Where a contract contains a provision that is intended to have effect

(a) in circumstances that operate, or but for the provision would operate, to frustrate the contract, or

(b) whether or not the circumstances referred to in paragraph (a) arise,

the court shall give effect to

(d) this Act only to the extent that appears to the court to be consistent with the provision.

Where

Where it appears to the court that part of a contract

(a) wholly performed before the parties were discharged, or

(b) wholly performed except for the payment in respect of that part of money the amount of which is or can be ascertained under the contract,

can be severed from the remainder of the contract, the court shall treat that part of the contract as a separate contract that has not been frustrated and shall apply this Act only to the remainder of the contract.