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Part 2

Erica contacts Fire Restoration Services Limited ("FRS') and Speedy Home Repair Ltd. ("Speedy") to obtain repair estimates. Each company sends a representative to inspect the damage. On December 18th Erica finds 2 written estimates in her mailbox. The first from FRS reads

"Estimated cost to repair all damage - $33,000.00. Estimate good for 7 days."

The second estimate from

Speedy reads

"Total cost of repairs - $27,000.00. Immediate reply required."

Erica had been more impressed with the FRS representative and hoped to have them do the repairs. The price difference was, however, significant. Erica sent emails to both companies at the email addresses provided with the estimate. The emails were sent at 8:00 p.m. on December 18th. To FRS Erica wrote:

"Your price seems high. Could you re-examine your estimate and lower the price. I have another quote for $27,000.00."

To Speedy she wrote:

"I am seriously considering your offer. Please keep open for 5 days."

Speedy did not respond. On December 19th FRS responded by email as follows:

"We regret to advise that we cannot reduce our price."

On December 23rd at 7:00 p.m., Erica made her decision opting for the lower price. She sent an email to Speedy as follows:

"I accept your offer. How soon can the work be completed?"

The email was "received" by Speedy at 9:00 a.m. on December 24th when their computers were turned on when their office opened, but was not opened or read until 9:30 a.m. Earlier on

December 24th (at 9:00 a.m.) the representative at Speedy had sent the following email to Erica:

"Yesterday we accepted another job and therefore will not be able to complete your work. Thank you for considering Speedy."

Erica opened the email from Speedy at 9:25 a.m. and immediately called Speedy claiming that there was a valid contract. Speedy refused to do the work.

On December 25th, Erica decided that she had no choice but to hire FRS at the higher price. At 11:00 a.m. she sent an email as follows:

"I accept your offer at $33,000.00. Please start as soon as possible after Boxing Day."

The email was received and opened by FRS on December 27th. FRS responded:

"We are sorry to advise that we are unable to accept your offer. We would be prepared to complete the job for $45,000.00. Material and labour is in short supply."

Erica commences an action against both FRS and Speedy for breach of contract.

Required: Examine the issues that will be raised by the parties, the applicable principles and the likely result of the litigation.