1. Sam agrees to build an extension to Jaskaran house. At the time they enter the agreement, the price of building materials is increasing week by week. Sam is reluctant to set a price for the work until he knows how much it is going to cost. Jaskaran agrees in the contract that he will pay Sam "the purchase price of materials as at the date of completion plus $2000 for labor". The parties also agree that the work must be completed by the end of June, as Jaskaran family is coming to visit him at that time. Before the work begins, there is an unexpected increase in labor costs and an equally unexpected drop in the price of building materials. Sam tells Jaskaran that he will need to increase the labor component to $22,000 or not do the job at all. Jaskaran is anxious that the work be completed by the end of June so reluctantly agrees to the change. Sam builds the extension but does not finish it until the middle of July. Because of this, Jaskaran had to pay for his family to stay in a hotel for three weeks at a total cost of $6000. Jaskaran is now refusing to pay Sam more than the price of materials plus $2000 for labor. In addition, he wants Sam to compensate him for the money he had to pay for the hotel.

Required: Answer the following questions. In each case, give reasons for your answers, and support your reasons with case law.

i. Discuss precisely if there is a valid enforceable contract between Jaskaran and Sam? (3 marks)

ii. Explain the arguments that Jaskaran could use to support his refusal to pay Sam more than theagreed price? (3 marks)

iii. Identify the arguments that Jaskaran could use to support his claim for compensation for the hotel? (2 marks)

iv. Explain the arguments that Sam could use to support his claim to the $22,000 he wants Jaskaran to

pay? (2 marks)