Question: problem solving ether and saint bought a vacant land in...
Ether and Saint bought a vacant land in the outskirts of the Island of Viti. The land is surrounded by pristine beaches and tranquility. Ether and Saint want to build an apartment on the land. In due course, they intend to occupy one flat and rent out the other flats. Saint had also promised Ether that he would do a swimming pool and gym for her.
Ether and Saint spoke with few contractors, and eventually engaged the services of PP Constructions Limited to construct their apartment. PP contractors assured Ether and Saint that all constructions works would be carried out according to the specifications/instructions provided by them. PP contractors further assured Ether and Saint that PP contractors would personally carry out all works relating to the construction of their dream apartment. Ether and Saint are thrilled.
Ether and Saint and the contractors agree on the following terms:
- That the construction would begin on 10 February 2020.
- That the construction work would be completed within a reasonable timeframe.
- That the total contract sum would be $950,000.
- That the contract sum would be paid to the contractors by Ether and Saint in 8 different stages, based on the amount of work completed. The contract further stated that payments would only be made if the work is completed as per the specifications provided.
- That an initial payment of $250,000 would be made prior to commencement of work, and
- Construction is to commence as soon as the initial payment of $250,000 is made to the contractors.
PP Constructions Limited received the initial sum of $250,000 on 09/02/20, however due to bad weather they could not commence work until 27/02/20. PP Constructions Limited feels that the contract sum of $950,000 is not sufficient anymore and wants more money from Ether and Saint.
Contrary to the agreement, PP Construction Limited subcontracted some foundation works to a one MK Contractors and his team.
Upon half completion of the foundation works PP Construction Limited approached the Ether and Saint for further payment, being the second instalment.
Before making any further payment the couple insisted on inspecting the completed works, to ensure that work was done according to the specifications. The couple went for inspection on 08/04/20. They were appalled to see that the foundation work had not been fully completed. In addition to this they are not happy about how the foundation had been laid. The layering of the foundation seem to have been rushed and irons which were mounted look defective. The poles were not mounted according to the specifications provided. The foundation layer was not properly filled in, and it had huge gaps, and this was contrary to the instructions provided to PP Constructions Limited.
Ether and Saint are very frustrated and they terminate the services of PP Construction Limited. Ether and Saint want their $250,000 back. They allege that PP Construction Limited breached the terms of the contract.
PP Construction Limited insist that they would not return the $250,000 and further demand$100,000 for the half completed foundation works. MK Contractors and his team are yet to be paid $30,000 and they are demanding their money too.
Reffering to the above case study; answer the following questions:
1. Ether is unhappy that Saint is now not going to build her swimming pool and gym. She has approached you separately, and wants to know whether she can take some legal action against Saint. She wants you to keep this conversation confidential (between the two of you).Comment on this matter.
2. Identify any statement amounting to warranty and condition in the above contract.
3. State the details of offer and acceptance as discussed between the parties.
4. Do you see a counter-offer? If so, provide details.
5. What was consideration provided by each of the parties?