The owner wants to upgrade her candle-making facility and decides to install an innovative solar heating system, which the Contractor agrees to supply and install the system at a cost of $50,000 (the system costs $10,000 with the installation services accounting for the remainder of the Contractor's costs). The contractor’s spouse (“Spouse”) wants two dozen candles from the Owner to sell in Spouse's home goods retail store. If the Owner agrees to furnish the Contractor with two dozen candles within 30 days of completion of the Contractor's work at the Owner's facility, the Contractor will drop the price by $5,000. On June 1, the parties agree to the latter arrangement in a valid written contract in which Contractor promises to start the job on June 10 and to complete it by October 1. 

The contract includes the following statement, “Timely performance by Contractor is important to avoid any delay in the production of Owner’s candles.” State law requires that all installations of the new solar systems be done by a certified solar technician. On June 5th, the only certified technician who works for Contractor, Tech, is injured in a car accident. The contractor immediately notifies the Owner and advises her that the start of the work will be delayed because of Tech’s accident. The owner replies, “You know that on-time performance is crucial. Yesterday, the city announced special tax breaks for facilities that install these solar heating systems by the end of the year. Can you still finish by then?” The contractor says, “I don’t know when we can start. It depends on how quickly Tech recovers.” The owner tells the Contractor that she is terminating the contract. The owner finds an alternative contractor to supply and install a similar system at a cost of $60,000, but Contractor 2 can’t start work immediately and the solar system is not installed until January 15. The owner misses the deadline for the city tax break and her production of candles is also reduced due to the delays in the installation of the system. Owner sues Contractor for breach of contract. Spouse sues Owner for breach of contract, seeking damages for Owner’s failure to provide the candles for Spouse's retail store.

1. Can the Owner prevail in her lawsuit against the Contractor? Discuss.
2. If so, can the Owner recover:
   a. The $10,000 in increased costs for the heating system supply and installation? Discuss.
   b. The lost profits for the delay in producing candles? Discuss.
   c. The value of the tax reduction? Discuss.
3. Can Spouse prevail in its lawsuit against the Owner? Discuss.

Answer rating: 100% (QA)

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