Yes, FM is given recognition in the Civil Law Act 1956. FM clauses are enforceable and will displace statutory provisions in respect of the adjustment of the rights and liabilities of parties to a frustrated contract.

Yes. Availability of remedies depend on terms agreed between the parties. FM clauses are construed according to the wording in the FM clause.

Depending on the wording of the FM clause. If the FM clause requires any steps to be taken, such as any notice requirement, that such steps should be followed. Generally:

• FM event is within the scope of the FM clause
• FM event is beyond the party's control
• Performance of the contract is substantially affected by the FM event

Depends on the wording of the contract but generally a party relying on an FM clause is required to use reasonable endeavors to mitigate the impact of the FM event.

Depends on the specific wording of the FM clause.

Common types of relief include:

• suspension of contractual obligations;
• exclusion from certain liabilities for non-performance or delay;
• termination of the contract.

If the contract does not contain an FM clause, then parties may have to ascertain whether the common law doctrine of frustration as found in section 57 of the Malaysian Contracts Act applies. The circumstances under which the alternative doctrine of frustration apply are more limited than typical FM clauses - performance must be rendered
legally or physically impossible to perform. If frustration applies, the contract will be deemed void and parties will be discharged from further performance. The Court will have a wide discretion to allocate rights and liabilities.

Section 15 of Civil Law Act 1956 regarding the rights and liabilities of parties to frustrated contracts will require refund of fees paid (subject to judicial discretion).

Section 7 of the Malaysian Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (COVID-19) Act 2020 – an act that was introduced to provide some form of temporary relief to parties affected by the pandemic from certain legal obligations – bars the enforcement of a contractual right against a defaulting party if such default arose due to measures prescribed, made or taken under the Malaysian Prevention and Control of Infectious Diseases Act 1988 to control or prevent the spread of COVID-19. This provision is only applicable to specific categories of contracts, such as construction work contracts, professional services contracts and leases of non-residential immovable property. While the provision was due to expire on 31 December 2020, its operation has since been extended to 22 October 2022.