Question
Billy Builders completed the knock down of Jenny's home, and put up the framing and entire building envelope for the new luxury house. The building
Billy Builders completed the knock down of Jenny's home, and put up the framing and entire building envelope for the new luxury house. The building is fully enclosed, and protected from things like water damage and easy access by thieves. However, before doing the drywall, interior finishing, and other remaining work, Billy Builders received a much larger contract in Fort McMurray. Bill Builders, not having enough workers to do both projects, abandoned Jenny's home partially complete, and went to work on the Fort McMurray project.
The contract for the Spruce Grove property was $1.7 million. Of that, $500,000 was for the knock down and disposal of the old home, and $1.2 million was for the construction of the new home. Jenny has paid a total of $1.3 million for the knock down and new build to Billy Builders. Jenny has reached out to a company called Lux Construction about finishing the project. Lux Construction has estimated that it will cost another $600,000 for it to complete. Jenny has the following questions for us:
1. Can she sue Billy Builders, and if she does, what type of claim should she bring against it? In other words, what would you characterize her claim as?
2. If she does chose to sue Billy Builders, how much should she sue for? How do you determine what amount she should sue for? What is the basis for that calculation and what do we call it?
3. If the building contract has a clause drafted into it that is titled "Liquidated Damages", and it says that if one of the parties cancels or abandons the contract before it is complete the other party is entitled to liquidated damages in the amount of $10 million, does that change your opinion on the first two questions? Do you think that Liquidated Damages clause will be enforceable? Why or why not?
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