Halfway through the completion of a building contract for Mr. and Mrs. Simpson,
ID: 423240 • Letter: H
Question
Halfway through the completion of a building contract for Mr. and Mrs. Simpson, the builder (a large proprietary company) realised that he had forgotten to include a 'price variation clause' in the agreement. Such a clause would have enabled the builder to pass on any significant increases in material costs during the course of the contract. The price of bricks increased during the course of the agreement due to the exit of two major competitors in the market, and the builder now wishes to pass on the costs to the Simpsons.
Knowing that he has no legal right to demand the money, the builder nevertheless calls the Simpsons and demands an extra $ 20,000 on top of the agreed purchase price and states that if the money is not forthcoming he 'can't guarantee that the house will be finished on time, if at all'.
The Simpsons were shocked by the request but signed an agreement to increase the purchase price by $20,000 because they felt they had no choice. The house was finished on time. The Simpsons have paid the originally agreed purchase price but the builder is demanding the extra $ 20,000 as agreed in writing by the Simpsons. The Simpsons seek your advice.
Explanation / Answer
In this scenario, the Simpsons are not liable to pay the extra money as demanded by the builders as there is no mentioned clause in the signed Truce that says on papers that they are bound to pay for the extra share for hiked price of the materials. However, on the builder's end too, its a loss incurred and is direct pinch in the pocket. Being unaware of the contingencies and the increased price owing to competition in the market, the builder too is at a suffering end witha huge amount involved.
What is suggestible is to take the matter up to the court and get the matter be put on legal papers stating the scenario and making it all said and done for once and for all, The builder should enclose the scenario and revise the initial agreement and the Simpsons to sign off paying the amount.
This would help remain a zero chance to be troubled for all the upcoming days and follow ups to acquire the money from the couple. They too will be donw with paying the bit , full or half( if the cort decides to adjoun on a note that the buyer is only suposed to pay half of the incurred amount as not mentioned in the initial agreement).
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.