Frustrated Contracts Act

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Sections3

• 1Definitions

  1 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.O. 1990, c. F.34, s. 1.

• 2Application of Act

  2 (1) This Act applies to any contract that is governed by the law of Ontario and that has become impossible of performance or been otherwise frustrated and to the parties which for that reason have been discharged. R.S.O. 1990, c. F.34, s. 2 (1); 1993, c. 27, Sched. Exceptions (2) This Act does not apply, (a) to a charterparty or a contract for the carriage of goods by sea, except a time charterparty or a charterparty by way of demise; (b) to a contract of insurance; or (c) to a contract for the sale of specific goods where the goods, without the knowledge of the seller, have perished at the time the contract was made, or where the goods, without any fault on the part of the seller or buyer, perished before the risk passed to the buyer. R.S.O. 1990, c. F.34, s. 2 (2). Section Amendments with date in force (d/m/y) 1993, c. 27, Sched. - 31/12/1991

• 3Adjustment of rights and liabilities

  3 (1) The sums paid or payable to a party in pursuance of a contract before the parties were discharged, (a) in the case of sums paid, are recoverable from the party as money received 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.O. 1990, c. F.34, s. 3 (1). Expenses (2) If, 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 i…