Fern Gully Nurseries Pty Ltd (Fern Gully) contracted with Jim Spade trading as Spade Cubbys (Spade) for Spade to construct 20 architecturally designed cubby-houses, with the houses to be completed by 1 October 2019 at a contract price of $20,000, with payment to be made on signing. 1 October 2019 was crucial to Fern Gully as time was required to have the cubby houses painted and decorated prior to the busy Christmas season. By the time it signed the agreement with Spade, Fern Gully had already presold 9 of the 20 cubby-houses to a property developer for $18,000. The property developer required them to be delivered to his site by 15 October 2019 at the latest. Fern Gully planned to sell the remaining cubby-houses to retail customers. Happy with the terms, both parties signed on 15 June 2019 and Fern Gully paid the $20,000 by electronic funds transfer. However, Jim soon realised that he had seriously underquoted on the job. He ran out of money by late August 2019 and it looked as if he wouldn't be able to complete the contract. Jim told Fern Gully of the situation and said that he wasn't able to continue. Fern Gully, aware that it would take longer to have the cubby houses completed if they engaged another builder, and aware that they would lose further business with the developer, suggested to Jim that he should complete the work, in return for which Fern Gully would pay Spade an additional $10,000. Jim accepted this suggestion and Spade completed and delivered the cubby-houses to Fern Gully on 1 October 2019. At that point, Fern Gully refused to pay Spade the $10,000.

Advise Jim.

How does it link to practical benefit?

Refer to the case in your answer: Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1 and Musumeci v Winadell Pty Ltd (1994) 34 NSWLR 723

Answer rating: 100% (QA)

Based on the provided scenario Jim could potentially claim for breach of contract against Fern Gully ... View the full answer