Fitit Ltd, a company that specialises in refurbishing retail premises, entered into contract with OutLet Ltd, a company that operates a chain of discount supermarkets. Under the contract it was agreed that Fitit Ltd would refurbish ve of OutLet Ltd's retail units for a contract price of 5million. OutLet Ltd agreed to pay Fitit Ltd one month after the refurbishments were completed. Fitit Ltd completed the work on 15t May 2015. In accordance with the agreement, OutLet Ltd were due to pay Fitit Ltd the full amount of 5million on 1St June 2015. However, Out Let Ltd were experiencing severe financial difficulties due to intense competition from rival supermarkets. As a consequence, OutLet Ltd were unable to pay the full amount as agreed under the contract. OutLet Ltd approached Fitit Ltd and explained that they would be unable to pay the full amount on the agreed date. Out-Let Ltd had, however, been able to secure financial support from one of their creditors allowing them to pay 3million on 1st June 2015. Fitit Ltd required payment on 1st June 2015 in order for them to purchase materials and equipment to allow them to commence another refurbishment project they had entered into with CostCo Ltd. The contract with Cost-C0 Ltd contained a penalty clause that would result in severe nancial penalties if Fitit Ltd did not commence the refurbishment as agreed. As a result, Fitit Ltd agreed to accept 3million from Out-Let Ltd in full and final settlement for the refurbishment. 3million still represented a healthy prot for Fitit Ltd under the contract and the payment received allowed Fitit Ltd to commence the refurbishment contract with CostCo Ltd as agreed