Ian is the Manager of the Aquatic Centre, a facility owned by the City Council.

Question

Ian is the Manager of the Aquatic Centre, a facility owned by the City Council. A decline in revenue had led the Council to implement a program of cost savings across all of its services, and James was informed that he could no longer enter into contracts, or approve expenditure, exceeding $10,000. Interest in swimming and water sport generally had increased substantially since the 2016 Olympic Games, and James noted, with some alarm, that the Aquatic Centre needed some urgent improvements to meet the demand. One of these improvements involved a relatively minor extension to the men’s change room, costing $9,500. James signed a contract (on behalf of the Council) with Bob, a local builder. James told Brian, his immediate Manager at the Council, what he had done. After these works commenced, Bob told James that a minor structural problem had arisen and that to rectify it, and complete the works to the entire satisfaction of the Council, a variation to the building contract would be necessary, in the sum of $5,000. James authorised a variation to the contract, as he believed that he could persuade the Council that the work was necessary. During a routine visit to the facility by Brian, the works taking place in the men’s change room were inspected, and Brian expressed satisfaction with what he had seen. However, James did not tell Brian about the variation to the building contract. After completion of the works, the contractor submitted his account for $14,500 to the Council for payment. Brian informs the contractor that the Council would not be paying the account, as it was not authorised.

Required Advise Bob of his chances of being paid, in what amount, and by whom. Support your answer with reference to relevant legal principles and cases. Do not refer to legislation.

USING PIRAC(Paties. Issues. Rules, Apply and conclusion) to answer it

Explanation / Answer

In such a scenario, James was responsible for paying the extra cost which was burdened on contractor bob by James as he told bob that he will satisfy council that this extra work was necessary. As a contractor, its his duty to inform officials about any lacking and how should it be rectified and thus what will be the extra costs for rectifying it. In the whole scenario, James authorised work without the approval of council and thus the entire burden of $5000 should be on James and he should be responsible for this payment as builder on its has informed James prior to vraition work that the problem has arised and what should be the changes and increased costs.

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