Is owen entitled to cancel the contract today

Assignment Help Business Law and Ethics

Reference no: EM133281946

Question: Owen is the owner and operator of a motel at the foot of Snowy Mountain in Queenstown. Barbara is a builder. On Day 1, Owen and Barbara sign a contract under which Barbara will do major renovation works on the motel, and Owen will pay Barbara $100,000 after the works are completed. The works are such that the motel cannot have any customers during the works.

(a) In the negotiations leading to the contract, Barbara estimates that it will take sixty days to complete the works. Owen then insists that the start date be no later than Day 20. He explains that the two months after the estimated date of completion (if the start day is Day 20) are crucially important to his motel business because the income from the two months amounts to half of the annual income. He says to Barbara: "That's how important the timing is for me. If you cannot start on Day 20, I'll have to find another builder to do the job." Barbara assures Owen that she can start on time. As a result of this discussion, Clause 16 of the contract states that "Barbara must start the works on Day 20." Today is Day 26, and Barbara has not started the works yet. Is Owen entitled to cancel the contract today? Under CCLA 2017 or Consumers Guarantee Act

(b) Barbara starts the works on Day 20. However, Owen validly cancels the contract on Day 33 because of serious breaches of various contract terms by Barbara. Owen then hires another builder, Becky, to complete the works for $130,000. The price is reasonable. Becky completes the works speedily. Nevertheless, Barbara's breaches of contract cause a delay of completion for 15 days (between the date of completion if Barbara had performed the contract and the date of Becky's completion). Owen has to cancel or decline bookings that were made or would have been made for the period of the delay, which results in a loss of profit of $50,000. Assuming that Owen has not paid any part of the price to Barbara under the contract between them, how much damages is Owen entitled to recover from Barbara?

Reference no: EM133281946

Questions Cloud

Do you believe healthcare professionals personal integrity : Do you believe that the healthcare professional's personal integrity was compromised by the error in judgement?

Styles of behavior characterize jeff skilling : In what ways do the following personal styles of behavior characterize Jeff Skilling, Andy Fastow, and Ken Lay - Adapted from a publication of the Institute

Benny does not contest this recollection advise diana : This is really exciting, let's get cracking with getting this thing designed and built.' Benny does not contest this recollection. Advise Diana

Identify challenges to program evaluation : Identify challenges to program evaluation and quality improvement. Reflect on strategies to turn the challenges into opportunities for improvement

Is owen entitled to cancel the contract today : Is Owen entitled to cancel the contract today? Under CCLA 2017 or Consumers Guarantee Act and how much damages is Owen entitled to recover from Barbara

Design an effective training process for employees : The focus is to help the managers design an effective training process for employees in their department

Has the exclusion and limitation clause : BUS 191 New Zealand College of Studies Has the exclusion and limitation clause are validly incorporated, and if yes, whether the parties have validly contracted

Identify and provide an example of reasons : BUSINESS L 367 University of Maryland, University College Identify and provide an example of 2 reasons why a party to a valid and enforceable contract

What is another name for low blood glucose : List 10 signs and symptoms for recognizing low blood glucose. What is another name for low blood glucose?

User Account

All Pages