(1) Where a contract to which sections 1 to 4 apply has become impossible of performance or been otherwise frustrated and the parties to that contract have for that reason been discharged from the further performance of the contract, this section shall, subject to sections 2 and 3, have effect in relation to that contract.

(2) Subject to subsection (3), the sums of money paid or payable to a party in pursuance of the contract before the time when the parties were discharged under subsection (1) shall, in the case of sums of money so paid, be recoverable from that party, and in the case of sums so payable, cease to be so payable.

(3) Where a party has incurred expenses before the time of discharge in, or for the purpose of, the performance of the contract, the Court may allow that party to recover or to retain out of the sum of money received by that party under the contract, the amount not exceeding the expenses so incurred or the total sum of money payable to that party under the contract, that the Court may consider just having regard to the circumstances of the case.

(4) In estimating, for the purposes of subsections (1), (2) and (3), the amount of the expenses incurred by a party to the contract, the Court may, without prejudice to the generality of those subsections, include the sums of money that appear to be reasonable in respect of overhead expenses and in respect of the work or services performed personally by that party.

(5) In considering whether a sum of money ought to be recovered or retained under this section by a party to the contract, the Court shall not take into account sums of money which have, by reason of the contract, become payable to that party under a contract of insurance unless there was an obligation to insure imposed by an express term of the frustrated contract or by or under an enactment.