Doug, a developer, and Bill, a builder, entered into a contract. Under the contract, Bill was to build a building for Doug for $100,000 and was to receive a $10,000 on-time bonus if he were to complete construction by a specified date. Bill in turn, entered into a contract with Ellen, an electrical contractor. Under this contract, Ellen was to do the electrical work for the building for $15,000. At the time she entered into the contract, Ellen was not aware of Bill's on-time bonus, but learned about it before she was to begin the job. In the midst of the job, after receiving $3,000 in progress payments, Ellen decided she could not profitably do the electrical work for $15,000 and quit. Bill looked diligently for an electrical contractor to complete the work at the lowest cost.

The only electrical contractor Bill could locate was Roger. Roger demanded $20,000 to complete the work. Bill agreed and paid Roger $20,000 upon completion. In spite of Bill's best efforts, and solely because Ellen quit the job, Bill completed construction late and as a result, did not receive the on-time bonus.

Use IRAC analysis

Call of Question 1:Is Ellen liable to Doug for any damages Doug may have incurred as a result of the late completion of construction? Discuss

Call of Question 2: Is Ellen liable to Bill for:

a) The loss of the on-time bonus? Discuss. b) For any other damages? Discuss

Determine whether the contract(s) is(are) controlled by the UCC or Common Law.

- Rather than asking you to "Discuss Ellen's liabilities", I am asking you to specifically discuss two issues that Ellen may be liable.

- Remember that Doug is the Developer not the Contractor. How can Ellen's actions interfere with Doug's development?

- Discuss if you think there was a breach and by whom?

- Were there any damages in consequence of a breach?