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.Assignment 2 - ....

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Facts:         

Bob and Linda are married. They own and operate a hamburger restaurant in Vancouver. Bob recently hired a contractor to renovate the restaurant. Bob and the contractor discussed the terms and conditions of the contract, but nothing was ever put into writing. The renovation went very badly, and Bob decided not to pay the contractor any money. The contractor threatened to sue Bob and Linda for payment of the agreed-upon contract price. The contract called for the installation of a new hardwood floor. The contractor installed an inferior laminate floor, as the hardwood floor product had been discontinued. The contractor installed the laminate floor improperly. Bob is going to have to hire another contractor to fix the many mistakes that were made.

Issues: 1. Is the contract for the renovation of the restaurant between Bob and the contactor enforceable? 2. Was Bob in the obligation to pay the agreed-upon contract price after the contractor performance? 3. What options does Bob has to solve this issue?

Rules:   

Contract Law Fundamental Breach Doctrine Contract Act

Analysis: [1] Elements in Enforcement of Contracts, as stated in, Dorothy DuPlessis et al., Canadian Business and the Law, 6th ed (Toronto: Nelson Education, 2017). ISBN: 978-0-17-679441-5at p 202:  Privity of contract: The plaintiff has to establish that there is a contract between the parties.  Breach of contract: The plaintiff must prove that the other party (the defendant) has failed to keep one or more promises or terms of contract.  Entitlement to a remedy: The plaintiff must demonstrate tat it is entitled to the remedy claimed or is otherwise deserving of the court’s assistance.

Based on the facts and the elements written above, we can proceed to conclude whether the contract is enforceable or not.

Bob and the contractor do not have written contract, making it difficult for both parties to present in court. If we read the elements of a contract in Dorothy DuPlessis et al., Canadian Business and the Law, 6th ed (Toronto: Nelson Education, 2017). ISBN: 978-0-17-679441-5 at p 97-98. We will note that it is not necessary for the contract to be in writing after there is an agreement between the parties. An oral agreement in this case makes the first element valid to conclude whether it is enforceable or not. The contractor promised to provide a certain kind of building material and no other, and that material happened to be discontinued. The contractor did not deliver the hardwood floor, thus making a fundamental breach in the contract. Bob, having to hire another person to finish and improve the terrible work done by the contractor. He is entitled to remedy. [2] Bob asserts right to not pay the contractor the agreed-upon price and putting an end to the contract. The contractor did not only breach a fundamental condition of the contract. The contractor was also repudiating Bob by threatening to sue him and his wife, Linda. The governing authorities support the proposition that either a fundamental or repudiatory breach of contract will entitle the innocent party to terminate the contract. Some reasons for Bob to end the contract are: a. the deficiencies in performance of the renovation of the restaurant. b. failing to deliver the hardwood flooring, one of the conditions for the contract fulfillment. [3] An innocent party faced with a repudiatory breach of contract has a choice. He may: 1. decline to “accept” the repudiation, affirm the contract and insist that the other party continue to perform the contract on its original terms; or 2. “accept” the repudiation, treat the contract as at an end, and sue for damages. Bob decided option number two (2). He has all the right to sue the contractor for breach of contract. Though, Bob has not incurred any financial loss, as no monetary consideration has been paid to him, therefore no punitive damages will be awarded. If it is the case that the new contractor’s job for the renovation of the contract results in a higher price due to the bad work of the former contractor. Bob might be entitled to pecuniary damages. Arbitration would be a good option in this case, as the costs are lower than litigation, and is a faster process. As both parties involved have small businesses, and the contractor has already experienced a financial loss, keeping expenses low in finding a resolution is a priority. If arbitration is unavailable, then small claims court is an opportunity for dispute resolution. Conclusion: The contractor, Bob and Linda could have avoided a lot by making a written contract rather than an oral agreement regardless of the level of their business relationship. The contractor is all the time doing work for companies and other people and had to make sure to protect himself in any situation. Bob and Linda had every right to claim for the bad service provided by the contractor.

In the absence of a contract, there was evidence of poor work in the renovation of the restaurant. Hence, they had every chance of winning in court or by other method of dispute resolution. The contractor could have created clauses in the written contract to reduce the damages in the event of a situation like the one that happened. Bob and Linda could also have taken another to preserve the relationship with the contractor and to avoid unnecessary litigation. Giving him the opportunity to fix the poorly installed flooring....