Jackson Excavation Ltd. provides services to contractors by supplying heavy machinery and operators for excavation and various types of fill for building lots. Jackson managed to obtain for the first time a contract with a prominent residential builder, BuildCo, for work on a 10-home development. The value of the work and fill was $60,000 and this was agreed upon as the contract price.

After the work was completed and the invoice sent, Jackson learned that BuildCo had just been granted approval for a 50-home subdivision. Hoping to secure the excavation work for this project as well, Jackson Excavation Ltd. immediately sent a letter to BuildCo stating that it would accept $50,000 as payment in full for the job just completed. He also mentioned in the

letter that he hoped they would continue to do business together. BuildCo responds thanking Jackson Excavation Ltd. from the price reduction and sends a cheque for $50,000.

1. Does BuildCo still owe Jackson Excavation Ltd. for the remaining $10,000? In other words, if Jackson Excavation Ltd. later tried to recover the remaining $10,000, would it be able to avoid paying this sum? Why or why not? (5 points)

2. Imagine Jackson Excavation Ltd. comes to you for legal advice before offering the reduced price. Jackson Excavation Ltd. wants to make sure they are creating a valid and enforceable contractual relationship with BuildCo that ensures they get the contract for the new 50-home subdivision in exchange for the price reduction. What would you suggest they do differently in order to achieve this? (HINT: there may be more than one option) (5 points)