Reference no: EM132209007
Background:
This lawsuit arises from B’s decision to ask A to perform an aspect of the job using A’s grouting technique.
A is an established firm specializing in a form of foundation work known as grouting, which consists of pressurized injection of a cement-based mixture into the soil underlying a building to arrest subsidence and, in some cases, raise foundation walls.
In the summer of 1990, B, a small construction firm, entered into a contract with the private developer to stabilize and partially reconstruct a building in the District of Columbia. The structure was a relatively old and was built on filled ground. Over time, the structure sunk on all four sides, causing the floors to bow 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.
Facts:
In early August, A and B discussed the project over several conferences and telephone calls. On August 14, A submitted a written proposal to B. The proposal included A’s standard terms and conditions.
A’s proposal 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 limitation on the total price of the job.
After further conversations with B, B sent A an email on August 25 indicating A’s proposal was acceptable subject to “verbally agreed changes” and that a signed revision would follow. The next day B prepared and signed an edited version of A’s proposal to be mailed to A.
The purpose 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 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 nor did A inquire 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.
Dispute:
Although A was eventually able to stabilize the perimeter of the building, it was unable, despite significant efforts, to achieve the desired rise in the northeast comer of the building. As the work proceeded, A reported to B daily. 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 it should stop working.
B 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 private developer, 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. A did no more work.
Questions:
1. What would A argue to support its claim?
2. What would B argue to support its claim?
3. Was there a contract? If so, what were its terms?
4. Suppose there were no contract.
a. Can A recover from B for the work A performed?
b. Can B recover the payments it made?
5. How could this misunderstanding have been avoided?