On January 3rd, 2009 Holiday Inn Hotels entered into a contract with Great Designs Inc., an interior decorating firm, to have their hotel rooms re-decorated with new carpeting, bedspreads, curtains and wall art. Holiday Inn Hotels paid Great Designs Inc., $100,000 upfront and the work was to be completed by June 1st, 2009. On June 1st, 2009 work in 30% of the rooms was still not complete. The Hotel had a large conference group checking in on June 30th, 2009 that would result in all the rooms being occupied. The Hotel, therefore, terminated its contract with Great Designs Inc., and hired a different designer to finish the work. The new designer completed the work on June 30th, 2009 at an additional cost of $15,000. Answer the following questions:

1. Did Holiday Inn Hotels act correctly in discharging its contract with Great Designs Inc.? Explain.

2. Assuming that Holiday Inn Hotels did properly terminate Great Designs Inc., to what amount of damages is Holiday Inn Hotels entitled? Explain.