Reference no: EM132901914

Case: Please answer questions base on this case. thank you in advance

A is an established firm specializing in a form of foundation work know as grouting, which consists of pressurized injection of a cement-based mixture into the soil underlying a building for the purpose of arresting subsidence and in some cases actually raising foundation walls. In the summer of 1990, B, a small construction firm, entered into a contract with the Brazilian Embassy to stabilize and partially reconstruct a building in the District of Columbia known as the Brazilian Annex. The annex was a relatively old building constructed in large part on filled ground. The structure had sunk on all four sides, with the result that the floors bowed in the middle. B's task, among other things, was to stabilize the structure to prevent further sinking and to raise certain parts of the foundation, particularly the northeast corner, to partially alleviate the unevenness of the floors. This lawsuit arises from B's decision to ask A to perform this aspect of the job using A's grouting technique, in lieu of alternative methods available.

During early August 1990, Davis, a vice president of A, and Downey, B's president, discussed the project in a number of conferences and telephone calls. On August 14, 1990, Davis submitted a written proposal to which was annexed a standard set of conditions. The proposal, to the extent here material, made no guarantee that efforts either to stabilize or to lift the building would be successful, made no commitment as to time of completion of the job, and contemplated that the work would be billed at a per diem rate without any stated limitation on the total price of the job. After further conversations with Davis - the precise contents of which are hotly disputed - Downey sent Davis a telegram on August 25 indicating that A's proposal was accepted subject to "verbally agreed changes" and that a signed revision would follow. The next day Downey prepared and signed an edited version of A's written proposal to be mailed to Davis. The purport of the revision was to indicate that A was committed to stabilize the building and to lift the northeast corner by at least one and one half inches and that the job would be undertaken in approximately ten days with a maximum payment of $20,000. A never received this document or inquired as to why it had not been received as promised. Both parties proceeded on the assumption that they had come to some type of agreement, and work on the site began August 28. Although A was eventually able to stabilize the perimeter of the building, it was unable, despite protracted effort, to achieve the desired rise in the northeast corner of the building. As the work proceeded, A reported in writing daily to B, and B therefore had full knowledge that A was proceeding without marked success. At the end of eleven days of work, A billed B at the per diem rate in A's proposal, and the work was paid for in the total amount of $9,936.75. B at no time indicated to A that is should stop working. Downey constantly reiterated, however, that B had only $20,000 to pay for the work. A never consented to the $20,000 cap and urged B to seek an adjustment in the contract price from the Brazilian Embassy, which B consistently refused to do. After approximately twenty-five days of continuous work, A concluded that it would not be possible to lift the building one and one half inches and, requiring the equipment for another job, informed B that it was terminating work.

Questions:

1. What would A argue legally to support its claim?

2. What would B argue legally to support its claim?

3. Was there a contract? If so, what were its terms?

4. Suppose there were no contract. Can A recover from B for the work A performed?

5. Can B recover the payments it made? Why or Why not?

6. How could this misunderstanding have been avoided?