Question
Cayson engaged Dawson Builders Ltd (Dawson) to instal a new central heating system at a contract price of 100,000. The parties signed a contract that
Cayson engaged Dawson Builders Ltd (Dawson) to instal a new central heating system at a contract price of 100,000. The parties signed a contract that included the following terms:
The works shall be completed by 31st December 2020. Dawson shall pay 1,000 per day by way of agreed liquidated damages for any late completion of the works. Time shall be of the essence of this contract.
At the time of signing the agreement Cayson had shown Dawson confirmed bookings for stay at the hotel for the first two weeks of January 2021 suggesting a full house until that date and had informed Dawson that his average profits for a full house would be 800 per day.
By late December 2020 it became obvious that Dawson would be unable to complete the works in time due to a strike by Dawsons unionised employees. By this time, Cayson had received further confirmed bookings until 21st January 2021 to ensure a full house until that date. Dawson requested Cayson for an extension of time to complete the contract by 15th January 2021 and offered to reduce the contract price for the works to 98,000. Cayson refused to grant the extension of time. He proceeded to cancel all confirmed bookings for stay at his budget hotel until 21st January 2021. To protect his reputation, Cayson made alternative arrangements for stay at another budget hotel for all his would-be guests. The alternative arrangements cost Cayson 20,000, although cheaper alternative stay was available for 15,000 at a comparable budget hotel.
Further, as a result of the delay, Cayson also had to cancel a booking for a dinner party that the local football club had planned for its team on 9th January 2021, from which Cayson would have made a profit of 3,000. The works were finally completed on 14th January 2021.
Advise Cayson as to the damages he may recover against Dawson.
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