Reference no: EM133201239

Slodder Construction Co. entered into a contract with the City of Lowey. It agreed to build a tunnel under city hall in exchange for a total price of $5 million. Shortly after beginning the project, Slodder realized that it had entered into a very bad bargain. The job was much more difficult than initially expected. It would cost $15 million to complete. Slodder nevertheless carried on in order to protect its reputation. Somewhat surprisingly, however, after half the tunnel had been finished, Lowey breached the contract by refusing to give Slodder access to the worksite. At that point, the city had already paid $2.5 million to Slodder, and Slodder had already spent $7.5 million on the project. Another construction company completed the tunnel under a separate contract with the city.