The Frustrated Contracts Act

The Frustrated Contracts Act describes the rights and obligations of parties to a contract that becomes frustrated (impossible to perform) when the contract does not contain any provision for the consequences of frustration of the contract.

The Act does not apply to:

• a charter party;
• contracts for transporting goods by sea;
• contracts of insurance; or
• contracts entered into before March 28, 1994.

A provision in a contract providing for the arbitration of disputes continues to apply to the parties notwithstanding the frustration of the contract.