In January 2011, Paradise Motels (PM) engage Basic Builders (BB) to construct a 100-bedroom motel for 50
Question:
In January 2011, Paradise Motels (PM) engage Basic Builders (BB) to construct a 100-bedroom motel for 50 million. The terms of the building contract stipulate that the motel is to be completed by 1st May 2013. After 12 months, the building of the motel has clearly fallen behind schedule, and BB inform PM that they are having financial problems and will be unable to complete the motel in time. PM have already managed to secure full booking of the motel for the summer vacation season of 2013 and PM offer to pay BB an extra 150,000 to ensure that the motel is finished on time. BB agree to this arrangement and continue the building work. In February 2012, just before the motel is finally completed, PM inform BB that they do not intend to pay the additional 150,000. Advise BB of their legal position and what remedies, if any, they may have.