Kate entered into a contract with Sussex Design House Pte Ltd ("SDH") to renovate her 30 year-old apartment. Under the terms of the contract, SDH was to provide interior design, space planning and project management. Kate specified to SDH that she wanted the water pipes for the whole unit to be changed to cross-linked polyethylene (PEX) pipes since they were cheaper, more durable and reduce wastage in the long run. The contract stated that the project was to take 5 months commencing 1 July 2020. The contract sum was $80,000. According to the contract, Kate paid $8,000 immediately upon signing the contract. She paid 10% after the water piping was done and another 30% when the flooring and the walls of the apartment were installed. She then paid a further 20% after all the carpentry work was completed. The balance of the contract sum was to be paid when the unit was handed back to Kate. SDH arranged to hand the unit back to Kate on 1 Dec 2020. When Kate was going through the unit with the designer from SDH, she asked if the water pipes had been changed as instructed by her. The designer apologized and explained that there was a shortage of PEX pipes in the market and SDH had replaced the pipes with copper pipes to ensure timely completion of the project. Kate was very unhappy. She refused to pay the balance of the contract sum to SDH and insisted that SDH replaced the copper pipes with PEX pipes. SDH was unwilling to replace the water pipes because it would require a lot of work. They argued that the price difference between PEX and copper pipes would have been $2000 for the entire apartment which was a relatively small amount. They insisted that they should be able to recover the balance 30% of the contract sum minus $2000 difference in the price of PEX and copper pipes. (b) Discuss the LEGAL PRINCIPLES concerning the above case study, APPLY the legal principles, and CONCLUDE on whether SDH could treat the contract with Kate as discharged and recover the balance 30% of the contract sum minus the $2000 difference. Note: the focus of your answer should not be on breach of the terms of the contract. (35 marks)