Ezy-Build Pty Ltd (Ezy-Build) has a contract with Property Developers Ltd (PD) to build a commercial building on a busy suburban street corner for a new shopping centre. The contract specifies that the building is to be completed by 1 July in order to allow time for the developer to lease out the shops in time for the Christmas season. By clause 35 of the agreement, Ezy-Build is to pay agreed damages of $250,000 to PD if completion of the project is late.

Ezy-Build enters into a contract with Zap Electrical (Zap) to carry out a full commercial electrical installation for the centre. But Zap loses time on the work after some of its employees fall ill with Covid-19.

About half-way through the job, Ezy-Build becomes concerned that Zap is falling behind schedule. It promises Zap an additional $20,000 to complete the job on time. Zap changes some of its shifts and puts on two new employees to get back to schedule. The job is completed on time and Ezy-Build pays the agreed contract price to Zap. However, it refuses to pay the additional $20,000 because it says there were no additional obligations added to Zap's contract.

Advise Zap.