Question
1.In December, 2019, BuildIt signed a contract to build a new office building for OfficeWorks within 1 year. The cost of the entire project is
1.In December, 2019, BuildIt signed a contract to build a new office building for OfficeWorks within 1 year. The cost of the entire project is $10 million. The contract had the following force majeure clause:
"Force Majeure. No delay, failure, or default, other than a failure to pay fees when due, will constitute a breach of this Agreement to the extent caused by acts of war, terrorism, hurricanes, earthquakes, other acts of God or of nature, strikes or other labor disputes, riots or other acts of civil disorder, embargoes, or other causes beyond the performing party's reasonable control".
BuiltIt represented that it had the requisite union labor to do the job already in place when in fact, it did not have any of the union labor signed up to do the work.
In January and February of 2020, BuildIt erected the shell of the building (floors, walls, and roof). COVID hits in March of 2020 and things drastically change. BuildIt cannot obtain the necessary labor anymore and fails to perform any of the interior portion (interior walls, floorfinish, wallfinish and ceiling finish). BuildIt also runs into financial difficulties, stops all work on the building and demands that OfficeWorks pay BuildIt $5 million for one-half of the work completed. OfficeWorks refuses to pay BuildIt anything, hires another contractor and the cost of finishing the job is another $9 million. Office Works claims BuildIt is in breach of the contract, and it does not have to pay BuildIt anything. BuildIt claims it is not in breach and OfficeWorks has benefited by the portion of the work completed by BuildIt. Please discuss the claims and defenses of each party.
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