COVID-19 And The Frustrated Contract Act

As of June 1, 2020, the Supreme Court of British Columbia has resumed some operations, and therefore businesses with operations in British Columbia should be aware of the Frustrated Contract Act (British Columbia) (Act). The Act is likely to become more significant because of the COVID-19 pandemic. Businesses with operations in Alberta and Ontario should also be aware that those provinces have virtually identical statues that share many similarities with the Act.

In our March 2020 Blakes Bulletin: COVID-19 and Your Contracts, we outlined how contractual relationships may be affected by a breach of contract arising from or related to the COVID-19 pandemic, including the operation of force majeure clauses and the common law doctrine of frustration of contract. In this bulletin, we discuss the manner in which provincial legislation allocates losses arising from frustrated contracts in British Columbia, Alberta and Ontario.