Question: Premium Construction, located in Saint John, New Brunswick, agreed to build a warehouse for Orville in Fredericton for $500,000 and to have it completed

Premium Construction, located in Saint John, New Brunswick, agreed to build a warehouse for Orville in Fredericton for $500,0

Premium Construction, located in Saint John, New Brunswick, agreed to build a warehouse for Orville in Fredericton for $500,000 and to have it completed by the Christmas retail season. Unfortunately, Premium ran into difficulties and could not complete the warehouse on time unless it received more money from Orville to enable it to pay its employees overtime. Orville, although not happy about the situation nonetheless agreed in writing to pay an additional $10,000. Work progressed on schedule and the warehouse was completed on time. Once the work was completed, however, Orville refused to pay the additional $10,000. a. Is Orville legally obligated to pay the additional $10,000? Explain. (4 points) b. How might Premium have protected itself at the contract negotiation stage against such cost overruns? (2 points) c. If Orville and Premium were residents of Ontario would you answer (a) differently? (4 marks)

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