Salman signs a contract to build a warehouse in Sydney for his client. They agree on the price and time frame for the completion of the project. Salman hires two apprentices on lower wages than qualified tradespeople; he also hires another two labourers on a daily basis. Work is about to commence. But digging the foundation takes much longer than expected because Salman and his crew had to extract some large rocks embedded within the soil. The labourers he hired leave him and there are no other labourers he can hire on such short notice to replace them. One of the apprentices completes his apprenticeship and will not have to be paid full trade wages. The other apprentice leaves for Adelaide. Salman now has no labourers to finish building the warehouse. The cost of employing new tradespeople will mean that he will lose money in building the warehouse. He wants to terminate the contact and believes that he has grounds to do so due to frustration of contract. He then tells the client that he cannot proceed with building the warehouse but would like to be paid for the foundation work. (a) Can Salman correctly argue that the contract is frustrated? (b)Can he ask for payment for the foundation work done on the building?

Salman signs a contract to build a warehouse in Sydney for his client. They agree on the price and time frame for the completion of the project. Salman hires two apprentices on lower wages than qualified tradespeople; he also hires another two labourers on a daily basis. Work is about to commence. But digging the foundation takes much longer than expected because Salman and his crew had to extract some large rocks embedded within the soil. The labourers he hired leave him and there are no other labourers he can hire on such short notice to replace them. One of the apprentices completes his apprenticeship and will not have to be paid full trade wages. The other apprentice leaves for Adelaide. Salman now has no labourers to finish building the warehouse. The cost of employing new tradespeople will mean that he will lose money in building the warehouse. He wants to terminate the contact and believes that he has grounds to do so due to frustration of contract. He then tells the client that he cannot proceed with building the warehouse but would like to be paid for the foundation work. (a) Can Salman correctly argue that the contract is frustrated? (b)Can he ask for payment for the foundation work done on the building?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

A contractor has a job which should be completed in 135 days. At present, he has 80 men on the job and it is estimated that they will finish the work in 160 days. Of the 80 men, 50 are each paid 255 a day, 25 at 450 a day, and 5 at 790 a day. For each day beyond the original 135, the contractor has to pay 520 liquidated damages. Men are added so that he can complete the work on time. If of the additional men, 2 men are paid 470 a day, and the rest at 275 a day, would the contractor save the money by employing more men and not paying the fine? Show cashflow diagram
please help me
Ben London owns and operates Fantastic Footage, a film-editing company in Los Angeles that does contract work mostly for production companies in Hollywood. Not long ago, a local landscaping business completed nearly $8,500 worth of work around London's offices. While the initial bid seemed a little high for the amount of work that was actually done, there is no question that the work completed was of high quality, and London finally feels comfortable inviting potential clients to meet him at his office to discuss possible deals. However, because of an apparent oversight, the landscaping contractor never submitted a bill. It's been more than 15 months since the completion of the project, and London has come to conclude that the contractor somehow lost track of the project. He is thinking about calling the company to ask for a final invoice so that he can settle up, but business has been really slow over the last year or so, and it hasn't been easy to pay all of the bills as it is.…
Brown, a consulting engineer, agreed to sublet the making of the design drawings for bridge approaches to Black—provided that Brown secured the contract for designing this certain large bridge project. Assuming that Brown would get the job, Black contracted to employ White at a salary of $800 per month for one year. Brown failed to get the award. Is Black nonetheless obligated to hire White?
Andria was invited to a gala dinner and wanted to buy an expensive dress so she visited Marian, a well-known fashion designer. They entered into a contract for the acquisition of the for a total price of 2000 dollars. After finishing with the dress, Marian received a call from Andria saying that she no longer needed the dress because the dinner party was cancelled. Marian already paid for 1500 dollars on fabric and immediately started an action against Andria for breach of contract. However, two weeks before the court hearing, Marian sold the dress for the same amount of money which she would have receive from Andria. REQUIRED: State the purposes of awarding damages for breach of contract State the duty to mitigate loss State the level of damages Marian can claim for breach of contract
kong operates a boutique hotel in a resort area near Chenang, Langkawi. Depreciation on the hotel is 60,000 per year. kong employs a maintenance person at an annual salary of 41,000 and a cleaning person at an annual salary of 24,000. Real estate taxes are 10,000 per year. The rooms rent at an average price of 60 per person per night. Other costs are laundry and cleaning service at a cost of 10 per person per night and the cost of breakfast which is 5 per person per night. Required: (a) Indicate the number of rentals and the sales revenue kong needs to break even using the contribution margin technique. (b) If the current level of rentals is 4,000, by what percentage can rentals decrease before kong has to worry about having a net loss? (c) kong is considering upgrading the breakfast service to attract more business and increase prices. This will cost an additional 3 food costs per person per night. kongfeels she can increase the room rate to 68 per person per night. Indicate the…
A Project Manager (PM) wants to price out the cost for her project for the use of a piece of equipment. The company knows the piece of equipment is used by all projects combined an average of 31 hours per week. The company the PM works for actualy rents the piece of equipment from a 3rd party provider at a cost of $32000 per month and spends $19000 per year on maintenance (the 3rd party provider doesn't pay for it). WWhat would be the ABC cost for the use of the piece of equipment for the PM's project if the PM needs the equipment for 50 hours? Use 5 significant figures in your calculations. Your Answer:
Cramer subcontracted to Williams the furnishing and installation of all equipment for a large pumping station. The operation of the pumps, said the original contract, was to be guaranteed for one year. When the plant started to operate, certain defects in the pumps were discovered. To whom will the owner look for remedy - the contractor or the subcontractor? Why?
Josaline, the owner of a construction company, is planning to purchase specialized equipment to complete a contract awarded to her company. The first cost of the equipment is $250,000 with a life of 3 years at which time she will no longer need the equipment. The operating cost is expected to be $75,000 per year. Alternatively, a subcontractor can perform the work for $175,000 per year. Because the equipment is specialized, Josaline is notsure about the salvage value. She estimates a likely salvage of $90,000, but it might have to be scrapped for as little as $10,000 in three years. TheMARR is 15% per year.a. Is her decision to buy the equipment sensitive to the salvage value?b. Determine the salvage value at which the two alternatives break even.
Haresh
Mr. Buzz Lightyear is the project manager for a satellite project. He calculates that an in-house solution will cost the company $320,000 to create the top-secret software package and based on OPA information, another $10,000 per month to maintain the software. Ms. Hrt Thickl, the purchaser for the project advises Buzz that it would cost the project $233,000 to purchase the software. However the supplier requires a maintenance plan for each program installed which will cost the project $15,000 per month. Once the satellite is built the company plans on orbiting the satellite in a low orbit around Earth for 730 days. Question of Project Procurement