Andrea owns a bakery and needs to install a new oven.

On 1st May, she enters into a contract with Heat Ltd who agreed to install the

oven by 1st June, for a total price of 5,000. It is important that the installation is

completed by 1st June, as Andrea has a contract with Globex Ltd to provide

catering for their corporate event on 2nd June.

By mid-May, Heat Ltd inform Andrea that they are having difficulties with the

installation. The electrical system in Andrea's kitchen is complex, and Heat Ltd

need more time to ensure that the work meets relevant health and safety

guidelines. Andrea does not want to cancel her contract with Globex Ltd, and

keen to avoid any damage to the reputation of her business, she promises to pay

Heat Ltd an additional 500 so that Heat Ltd can hire a specialist electrician to

assist with the installation.

Globex Ltd discover that Heat Ltd will not complete the installation on time. They

also promise Heat Ltd an additional 500 if the installation is completed on time.

In exchange, Heat Ltd promise Globex Ltd that they will complete on time.

Heat Ltd install the oven on time, but both Andrea and Globex Ltd are refusing to

pay the additional amounts promised Heat Ltd.

Advise Heat Ltd. Following the IRAC method