Question 2 (10 marks) Antigone Contractors Pty Ltd is the head contractor for the construction of a $55 million high-rise apartment building on Frome Street, Adelaide. Antigone conducts a competitive tendering process for the letting of the structural steelwork subcontract which includes the fabrication, supply and installation of all structural steelwork for the project. The tender documents include: a schedule of site delivery and installation dates for the structural steel components; and a copy of Antigone's own in-house standard form of subcontract conditions which provide that the subcontractor may submit payment claims at the end of each month for works completed during the month. The lowest tender, in the amount of $4.75 million, is submitted by Ismene Steel Pty Ltd on 10 February 2021. Ismene's tender is, however, qualified as follows: We are unable to commit to the schedule of delivery and installation dates contained in the tender documents. Delivery and installation dates are to be the subject of future negotiations. Payment for the steel components is required to be made upon fabrication prior to delivery to site. The steel components will be properly stored off-site at our premises prior to delivery to site. After Antigone receives Ismene's tender, the parties enter negotiations in an attempt to agree on the outstanding contract conditions. On 18 February 2021, early in the negotiation process, Ismene receives a letter from Antigone which instructs Ismene to commence the steel works as soon as possible and assures Ismene that Antigone intends to enter into a formal contract for the supply and installation of the steelwork upon successful completion of subcontract negotiations. Negotiations between the parties do not go well and their commercial relationship sours. On 14 April 2021, negotiations between the parties eventually break down without agreement being reached on the outstanding terms and conditions. At this point, Ismene claims to have carried out work to the value of $1 million and Antigone has only made payments to date of $385,000 for the structural steelwork carried out. Ismene writes to Antigone stating: In light of the recent suspension of contract negotiations, we cannot carry on with the structural steelworks unless payment of the outstanding $615,000 for works done is received within the next 10 business days. Antigone replies to Ismene stating:UO Contract Administration We assess that no further payment is currently due for the structural steelworks due to damages owed to us by yourselves in the amount of $750,000 for breach of contract on the basis of late and out of sequence delivery and installation of the structural steel components at site. Furthermore, any cessation of works by yourselves before completing the contract works will be treated a breach of contract for which we will take immediate legal action. Ismene is angered by Antigone' response and wants to abandon the project. However, they are concerned about their legal position with respect to receiving their outstanding payment and any damages they may be liable for if they decide to abandon the works. Advise Ismene as to their likely legal position