Question
(a)Jackson Limited had contracted with Peterson Limited to construct a lorry for a fixed contract price of $2.1 million. After several months, due to the
(a)Jackson Limited had contracted with Peterson Limited to construct a lorry for a fixed contract price of $2.1 million. After several months, due to the inflation of raw materials, including spare parts, metals, wheels, Jackson Limited refused to continue with the construction unless the contract price was increased to $2.5 million, although there were no clauses in the contract which stated that the contractual price would be increased in the event the raw material price increased. Peterson Limited agreed to pay the increased the contract price, because it was negotiating a notably profitable charter for which it wanted to use the lorry. After the completion of the lorry, Peterson paid the amount of $2.5 million to Jackson. Nevertheless, after several months, Peterson claimed the payment of the extra $0.4 million was made under economic duress.
Advise Peterson Limited of its legal position.
(We need to provide a case law according to our lecturer, thanks!)
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