Johnny Contractor has secured a multi-million dollar contract with the Downtown County Council for the building of block flats. He has sub-contracted the electrical work out to Jason Voltage at a contract price of EC$800,000.00. When Jason Voltage has half-completed the work, he (Jason Voltage) realizes that he has underestimated the time that it would take to complete the work and that he will make a loss on the sub-contract. Having received EC$400,000.00 in progress payments, he approaches Johnny Contractor and threatens to abandon the work unless the sub-contract price is increased to EC$1 million. Johnny Contractor reluctantly agrees to this, fearing he will have difficulty in finding another subcontractor to complete the work. Jason Voltage then completes the work on time, but Johnny Contractor refuses to pay him the additional EC$200,000 which he has promised.

A. What legal advice would you give Jason Voltage? Give examples of cases to back up your advice.

B. Explain what advice you would give to Jason Voltage be, if he (Jason Voltage) had not threatened to abandon the work, but instead, he (Jason Voltage) was experiencing serious financial difficulties which made it apparent that he would not be able to complete his work on time, which would have resulted in Johnny Contractor being subject to a penalty Clause with Downtown County Council. As a result, Johnny Contractor offered to pay the additional EC$200,000 to ensure that the work was completed on time, but thereafter, once the work was complete, Johnny Contractor refused to pay.

C. Consider the rights and liabilities of Johnny Contractor and Jason Voltage in relation to this contract, if the following, alternative events occur when the work is two thirds complete:

(i) The building accidentally catches fire and is totally destroyed;

(ii) The Government announces that all building contracts with Downtown County Council have been terminated immediately due to a massive financial fraud in the tendering process and the building has been seized by the Government.

(iii) Jason Voltage has been convicted of a crime and is imprisoned for 20 years;

(iv) The Company that supplies the electrical wiring and supplies to complete the electrical work has gone out of business and there is no other source of supply. Jason Voltage uses the few remaining supplies which he has to complete the electrical wiring in his home