Contract Law: Frustration of Contract under Section 1(3)

What is the primary purpose of the Act according to Goff J in the case of BP Exploration Co (Libya) Ltd v Hunt (No 2) (1979)?

The protection of contractual rights
The apportionment of losses
The prevention of unjust enrichment (correct)
The promotion of fair trade practices

What is the court's consideration when deciding the sum to be recovered under Section 1(3)?

The effect of the frustrating event on the benefit
The benefit received by the party prior to frustration
The expenses incurred by the party prior to frustration
All of the above (correct)

What is the result when the frustrating event has destroyed the benefit under Section 1(3)?

The party that provided the benefit is entitled to recovery
The party that received the benefit is entitled to partial recovery
Nothing will be recoverable under Section 1(3) (correct)
The party that received the benefit is entitled to full recovery

Under which section of the Act is the provision of benefits confined?

Section 1(3) (A) Signup and view all the answers

What is the factor that significantly reduces the scope for recovery for the provision of benefits?

The effect of the frustrating event on the benefit (A) Signup and view all the answers

What was the court's decision regarding the promoter's claim for the recovery of $412,000?

The court ruled that the promoter was entitled to the full recovery of $412,000 due to their incurred expenses of $450,000. (B) Signup and view all the answers

What is the primary consideration under Section 1(2) regarding the recovery of sums paid?

The payment of money under the frustrated contract. (C) Signup and view all the answers

In the case of BP and Hunt, what is the payer entitled to recover under Section 1(3)?

A just sum, which is a fair sum for the benefit conferred. (C) Signup and view all the answers

What is the purpose of the court's decision in the given scenario?

To do justice between the parties, ensuring a rough equality of loss. (D) Signup and view all the answers

What is the significance of the Law Reform (Frustrated Contracts) Act 1943 in relation to the effects of frustration?

It applies to most cases of frustration, while the common law applies to some situations. (D) Signup and view all the answers

If Peter’s expenses totalled £2,000, what is the maximum amount he could receive under s.1(2)?

£500 (A) Signup and view all the answers

Under which section can Peter claim for the value of the benefit supplied?

s.1(3) (B) Signup and view all the answers

What is the position regarding Sabina’s recovery of the £1,500 under the Act?

She can recover the full £1,500 (A) Signup and view all the answers

What is the condition for Peter to retain the full £1,500 under the common law?

No total failure of consideration (C) Signup and view all the answers

What is the significance of Appleby v Myers (1867) in this context?

It did not alter the position as it stood under the common law (B) Signup and view all the answers

What is the primary concern of Section 1(2) in the event of a frustrated contract?

Recovery of sums paid or payable (C) Signup and view all the answers

If a party has incurred expenses in a frustrated contract, what is the court's discretion under Section 1(2)?

To allow the party to retain some of the money paid (D) Signup and view all the answers

What is the primary focus of Section 1(3) in the event of a frustrated contract?

Valuation of benefits obtained other than payments (D) Signup and view all the answers

In the case of Gamerco, how much did the performers themselves incur in expenses?

$50,000 (C) Signup and view all the answers

What is the limit on the recovery of benefits under Section 1(3)?

The value of the benefit obtained (B) Signup and view all the answers

What is a key factor that courts consider when deciding if a contract is frustrated?

The terms of the contract and the parties' knowledge and expectations (B) Signup and view all the answers

In the case of Canary Wharf (BP4) T1 Ltd v European Medicines Agency, what was the outcome of the court's decision regarding the EMA's lease of London premises?

The contract was not deemed frustrated due to Brexit (C) Signup and view all the answers

What is an important consideration for courts when determining if a contract is frustrated?

Whether the supervening event has rendered the contract 'radically different' (D) Signup and view all the answers

In determining if a contract is frustrated, what is an important consideration regarding the parties' expectations?

Their objective, mutually ascribable expectations (C) Signup and view all the answers

According to Rix LJ in The Sea Angel, what should courts consider when determining if a contract is frustrated?

The terms of the contract, its context, and the parties' knowledge and expectations (C) Signup and view all the answers

What is the primary consideration when a party seeks to recover sums paid prior to frustration?

The discretion of the court in all the circumstances (B) Signup and view all the answers

What is the limitation on the amount that can be retained or recovered for expenses incurred?

The amount paid or payable under the contract (C) Signup and view all the answers

What is the purpose of Section 1(2) in relation to money paid or payable prior to frustration?

To provide a partial refund of sums paid (B) Signup and view all the answers

Under which section is the provision of benefits confined?

Section 1(3) (A) Signup and view all the answers

What is the significance of the court's discretion under Section 1(2)?

It allows the court to consider all the circumstances (C) Signup and view all the answers

What is the main objective of the Law Reform (Frustrated Contracts) Act 1943?

To prevent unjust enrichment (D) Signup and view all the answers

What happens to the parties' future obligations under common law rules of frustration?

They are discharged (D) Signup and view all the answers

What is the condition for recovering money paid under the common law rules of frustration?

Total failure of consideration (C) Signup and view all the answers

How are benefits confined under the Law Reform (Frustrated Contracts) Act 1943?

Benefits are confined to the value of the work done (D) Signup and view all the answers

What is the jurisdiction under Section 1(2) of the Law Reform (Frustrated Contracts) Act 1943?

Recovery of sums paid (A) Signup and view all the answers

What is the significance of the valuation of benefits under the Law Reform (Frustrated Contracts) Act 1943?

It determines the amount of compensation payable (A) Signup and view all the answers

How are expenses incurred by parties dealt with under the Law Reform (Frustrated Contracts) Act 1943?

They are deducted from the recovery of sums paid (C) Signup and view all the answers

What is the effect of the frustrating event on the benefit under Section 1(3) of the Law Reform (Frustrated Contracts) Act 1943?

The benefit is destroyed (C) Signup and view all the answers

What is the limitation of the common law rules of frustration?

They leave any losses to lie where they fall (D) Signup and view all the answers

What is the criticism of the Law Reform (Frustrated Contracts) Act 1943?

It is poorly drafted, particularly in relation to s.1(3) (A) Signup and view all the answers