Alan Wake was a famous writer. His wife, Alice, was a famous photographer. Alan and Alice lived in Sydney NSW. They frequently rented a holiday cabin in the idyllic, small town of Bright F

Alan Wake was a famous writer. His wife, Alice, was a famous photographer.
Alan and Alice lived in Sydney NSW. They frequently rented a holiday cabin in the
idyllic, small town of Bright Falls NSW. The owner of the cabin was Carl Stucky.
They fell in love with the relaxing, cool climate of Bright Falls and decided to move
there.
Alan and Alice purchased Diver’s Isle, a small island located in Cauldron Lake, just
outside of Bright Falls. They wanted to build a large cabin on the island.
On 1 March, Alan telephoned Barry, a builder based in Bright Falls, to enquire about
building the cabin. Alan asked Barry about his building experience. Barry said, ‘I’ve
been in this business for 17 years. I’m the best in this part of New South Wales. Just
ask any of my clients. But – of course – the usual disclaimer applies. I’ll do best
to build you a high-quality cabin, but sometimes stuff happens, and I won’t be
responsible if something goes wrong!’
Alan told Barry about the cabin he wanted built on Diver’s Isle. Barry said, ‘Based on
what you want to do, I reckon you’re looking at a cost of about $400,000. That will
depend on the conditions at the island. I’d need to do a proper survey before I can
give a more definite figure.’
Although Alan was already inclined to hire Barry to build the cabin, Alan wanted to
shop around further before deciding. Barry said, ‘No worries. Let me know if you
want me to provide a quote.’
Alan was unable to progress his plans over the next four weeks due to work
commitments.
On 30 March, Alan and Alice visited Bright Falls for a long weekend to visit some
more builders and investigate whom the locals recommended. They rented their
usual cabin from Carl Stucky. After speaking to some builders, they were still inclined
to hire Barry. Indeed, Carl recommended Barry, because he had done a good job of
building several of Carl’s rental cabins.
On Sunday 2 April, Alan and Alice returned to Sydney. The following day, Alan
telephoned Barry and asked him to provide a quote to build the cabin. Barry said that
he would visit Diver’s Isle that day and email a quote either that evening or the
following day.
On the morning of 4 April, Barry emailed a quote to Alan. The quote was 2 pages
long and set out the specifications for the cabin and the timeline by when the
construction would be finished. The specifications provided for a 2-storey cabin to be
built, surrounded by a covered verandah. At the back of the cabin, wooden steps
were to be built down to a jetty, also to be built. (See here.) Work would commence
on 1 May and take 8 months. An all-inclusive price of $600,000 was quoted at the
end of the document. Underneath the price, it said ‘Please pay 10% deposit within 7
days of accepting this quote. Balance due on completion of work.’
Alan and Alice were shocked that the formal quote was $200,000 more than Barry
had initially informally quoted. Alan replied by email the same morning, ‘Thanks for
the quote, Barry, but that’s too much. I’m going to look elsewhere.’ Barry replied a
few minutes later with ‘Ok, no worries. It turns out that access to Diver’s Isle is a bit
tricky. That’s what made it more expensive.’
Alan and Alice discussed Barry’s quote later that night. They decided that they
probably would not find a better deal in Bright Falls, so decided to hire Barry anyway.
The following morning, Alan transferred $60,000 to Barry. He then emailed Barry: ‘Hi
Barry. I’ve changed my mind. I’ve transferred the deposit to you.’
Barry started work on 1 May, per the terms of the quote. He proceeded according to
the specifications but accessing Diver’s Isle proved to be even more difficult and
expensive than he anticipated. Nonetheless, he persevered.
Meanwhile, Alan and Alice agreed to sell their apartment in Sydney. They timed the
date of settlement1 to be 1 day after the day of completion of the cabin. They
1 Settlement is when a contract for the sale of land is completed. It is the date when the purchaser
pays the balance of the purchase price, and the seller transfers title to the land to the purchaser.

They arranged for removalists to move their furniture from their apartment to the cabin the
day before settlement.
Four weeks out from the date appointed for completion of construction, Barry
contacted Alan to discuss a variation of the contract. Barry said:
‘Look, I’m sorry to do this Alan, but I won’t be able to finish the job on time for
$600,000. It’s proved much harder getting stuff onto the island than I
anticipated. This is my proposition: I finish the building the house – including
the back verandah – everything, all on time as per the quote – but not the
back stairs and jetty. I know a carpenter in Bright Falls who could do the stairs
and jetty. I could have a word with him to see if he can do it for around
$10,000 – which is less than you’d find elsewhere – but I can’t promise
anything. But … I still need you to pay $600,000 as agreed. I know how that
sounds but – honestly – if I’m not promised this, I’ll have to stop work now.
With Covid shortages, inflation, and the difficulty accessing Diver’s Isle, I’m
teetering on the edge of bankruptcy. And if I stop work now, you’ll have to get
someone to finish the house. At least this way, you’ll get your fully functional
cabin on time. The only thing missing will be the back stairs and jetty.’
Alan said that he would like to see the state of the cabin before deciding.
Two days later, Alan and Barry visited the construction site. Alan was impressed by
the quality of the work. He correctly believed that Barry was telling the truth. Alan
said, ‘Ok, Barry. Finish the cabin and verandah by the contract date as agreed and
I’ll still pay you the balance as originally agreed. We can talk about the back steps
and jetty once we’ve moved in.’
Barry finished the house and verandah on time and did a great job. As agreed, the
only things missing were the back stairs and jetty. Barry asked Alan to pay the
balance of $540,000.
Answer the following questions.
Questions
1. Alan says that the contract between him and Barry is not valid because there
was no offer followed by acceptance. Is Alan correct?
2. Alan says that his promise to accept less than originally agreed from Barry for
the same price was not enforceable because Barry did not provide
consideration for it. Barry said that his promise to speak to the carpenter is
good consideration. Is this correct?
3. Assume that Barry’s promise to speak to the carpenter is not good
consideration. Can Barry nonetheless argue that Alan received some other
form of consideration to make Alan’s promise to accept less work for the
same purchase price enforceable as a contractual promise?
4. Assume that Barry has breached the contract by not completing all the work
he originally promised and Alan can sue for damages. Barry says that he is
not liable because he made it clear to Alan in their conversation on 1 March
that he excluded liability for anything going wrong. Is this statement a term of
the contract? (Assume that if it were a term, then it would protect Barry from
liability for breach of contract.)

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