Exe Ltd contracted to manufacture and deliver machinery to Wye plc for a price of £100,000. As required by the contract, Wye plc paid a deposit to Exe Ltd of £20,000. In order to fulfil its contract it has been necessary for Exe Ltd to purchase specialist tools and equipment. Before the contract was completed, Exe Ltd's factory was destroyed by fire. Neither Exe Ltd nor Wye plc was in any way responsible for the fire.

Which of the following is INCORRECT? 

(i) The contract between Exe Ltd and Wye plc has become frustrated.

(ii) The contract may remain enforceable if the parties have agreed a force majeure clause which specifies the repercussions of a factory fire.

(iii) As the deposit was payable before the contract became unenforceable, Wye plc will lose its deposit of £20,000.