Bill the builder is a general contractor and President of Bill's Builders, LLC. Two months ago, Bill was hired by Penny Wise, who owned a vacant piece of land. That day, the two parties signed a contract to build Penny a brand new, 3-bedroom townhouse on State Street for $1,000,000. In the contract, Bill promises to complete the work within three months. Penny accepted this offer in writing and gave Bill a down payment of $200,000 to get started.

It is now one month before the contract term expires, and Bill has completed just under half of the house. At the same time, Bill has unexpectedly run out of materials to complete the foundation, specifically steel. Steel prices have jumped 25%, which would all but eliminate Bill's profits if he bought the additional steel needed to complete Penny's house. In addition, Bill has been concerned about the health of his workers, and wants to pause construction until COVID-19 has been fully resolved.

Bill writes Penny a letter, which says the following:

Dear Penny:

I'm sorry that your house has fallen behind schedule. Unfortunately, I can't complete your house on time, and will likely need another month on the deal. Also, I need an extra $100,000 today to cover my new costs, like we talked about a month ago. Let me know. -Bill

Penny reads this letter and refuses to pay Bill another cent or give him extra time to complete her house. In response, Bill packs up his equipment, leaves the job site, and refuses to answer Penny's calls to continue working on the house.

Penny sues Bill's Builders, LLC for breach of contract in California Superior Court.

1) Introduction/Law [5 points]:

A) What is the definition of a contract?

B) What law applies (CL or UCC)?

C) Which party has the burden of proof?

D) What is the standard of proof (POE or BRD)?

E) What elements are required to form a contract?

2) Arguments [6 points]:

A) What are Penny's best legal arguments as to why there is a contract?

B) What are Bill's Builders, LLC's best legal defenses as to why there is not a contract?

3) Conclusion [3 points]:

A) If you are the judge in this case, who wins and why?

B) Other than suing Bill's Builders, LLC, is there anyone else who Penny should sue?