This Agreement is made effective
Business Law I
Assignment 2
Instructions: Write a 5 page paper in response to the fact scenario provided below.
Fact Scenario – Part 1:
Contractors, Inc. contracted with YourCollege to build a 20-room, 2-story classroom building, constructed of gray bricks, and according to architectural specifications provided by YourCollege. The building is to be located on campus at the corner of Campus Way and Academic Avenue at a contract cost of $5,000,000, and to be completed by August 1, 2017. This August 1 deadline would give YourCollege just enough time to move into the building and prepare the inside for classes to begin August 14. YourCollege informed Contractors that time was of the essence and that this is a tight timeline for moving into the new building.
The valid, written contract read, in part, as follows:
______________________________________________________________________________________________________________________________________
CONTRACT
This Agreement is made effective on January 10, 2017 by and between YourCollege and Contractors, Inc. (referred to in this Agreement individually as a “Party” and collectively as the “Parties”). The Parties hereby agree to the following:
1) Contractors, Inc. will build a 20-room, 2-story classroom building constructed of gray bricks, at the corner of Campus Way and Academic Avenue, in accordance with the architectural specifications stipulated by YourCollege and attached hereto and in compliance with building codes and regulations for new construction;
2) Contractors, Inc. will complete the construction project at a total cost not to exceed $5,000,000, inclusive;
3) Contractors, Inc. will complete the construction project not later than August 1, 2017. Time is of the essence.
YourCollege will pay Contractors, Inc. for the completed project, the sum of $5,000,000 not later than August 7, 2016.
Agreed, for and on behalf of the Parties:
John Smith [sign]
John Smith
President, YourCollege
Date: January 10, 2017
John Doe [sign]
John Doe
President, Contractors, Inc.
Date: January 10, 2017
____________________________________________________________________________________________________________________________________
Fact Scenario – Part 2
On May 28, 2017, after the construction was more than half completed, the cost of bricks used for construction of the building increased substantially in the marketplace so that Contractors could no longer construct the building for $5,000,000. Contractors told YourCollege that it would need an additional $250,000 to complete the building using gray bricks on the exterior. YourCollege agreed to modify the original contract to increase the construction costs by $250,000, bringing the total cost of the project to $5,250,000.
YourCollege and Contractors drew up the following contract modification as an amendment to the original contract:
______________________________________________________________________________________________________________________________________
CONTRACT AMENDMENT
This Amendment Agreement is made effective on June 1, 2017 by and between YourCollege and Contractors, Inc. (referred to in this Agreement together as the “Parties”). The Parties, having entered into an Agreement on January 10, 2017 for the construction of a building, hereby agree to the following modification to the original Agreement:
1) In addition to the contractual agreed upon cost of $5,000,000, YourCollege will pay Contractors, Inc. an additional $250,000 to build a 20-room, 2-story classroom building constructed of gray bricks, at the corner of Campus Way and Academic Avenue;
2) YourCollege will pay Contractors, Inc. for the completed project, the sum of $5,250,000 not later than August 7, 2017;
3) This modification does not in any way change any other terms of the original Agreement (attached hereto).
Agreed, for and on behalf of the Parties:
John Smith [sign]
John Smith
President, YourCollege
Date: June 1, 2017
John Doe [sign]
John Doe
President, Contractors, Inc.
Date: June 1, 2017
_______________________________________________________________________________________________________________________________________
After the contract modification, Contractors continued to work on the building but did not meet the August 1 completion deadline. The building was completed on August 21, 2017.
In the meantime, fall semester classes began at YourCollege on August 14, making it necessary for YourCollege to lease classroom space from August 14-September 4, 2017. As a result, YourCollege had to hold classes in the leased space for 3 weeks until September 4 because it took 2 weeks (from August 21) for YourCollege to move into the new building and prepare it for classes. The lease costs were $5,000 per week, for a total of $15,000 for 3 weeks.
YourCollege paid Contractors $5,000,000 on September 4, but refused to pay the additional $250,000. YourCollege filed a lawsuit against Contractors for breach of contract.
Contractors countersued YourCollege for breach of contract.
Questions to Address in your Paper:
Please label each part of paper as listed below.
Part I: Discuss the basis of a breach of contract claim by YourCollege against Contractors, any potential damages YourCollege could claim and the likely outcome of a lawsuit.
3-4 paragraphs minimum with in-text citations; in depth, comprehensive; outside resources not necessary as all classroom resources will be sufficient.
Part II: Discuss the basis of a breach of contract claim by Contractors against YourCollege, any potential damages Contractors could claim and the likely outcome of a lawsuit.
3-4 paragraphs minimum with in text cites; in depth, comprehensive; outside resources not necessary as all classroom resources will be sufficient.
NOTE – You must provide a detailed analysis and scrutiny of the facts in this case. Follow theIRACstructure discussed in class, or other similar case analysis format, specifically identifying: a) the legal issues presented, b) the relevant rules of law that apply, c) your analysis of the case and d) your conclusions about the outcome. In order to earn full credit, your analysis must be well supported by legal principles found in your sources. You may apply outside sources in addition to using course materials. If you assert your opinion or your conclusions, it is important to show how you arrived there. What are you relying upon to draw your conclusions (what facts and what laws)? Please let me know if you have questions.
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