Question
Storit Pty Ltd is a warehousing company which owns and operates warehouses throughout New South Wales and Justin Kyeon is a director of Storit. BTW
Storit Pty Ltd is a warehousing company which owns and operates warehouses throughout New South Wales and Justin Kyeon is a director of Storit. BTW Construction Pty Ltd is a construction company and Nicole Myers is a manager of BTW. Justin contacted Nicole to have BTW construct a warehouse in Sydney and emphasised to Nicole that the project had to be completed on time.
The construction contract contained the following clauses (amongst other clauses):
- BTW was required to complete the project within 25 weeks
- For each day that BTW failed to complete the project on-time BTW would be required to pay Storit $1,000.
- The contract could only be amended in writing and signed by the parties.
Halfway through the project, Justin called Nicole and told her that Storit was no longer in a rush to get the warehouse completed and BTW could take as long as it wanted to complete the project. Based on Justin's comments, Nicole caused BTW to commit less resources to the project and BTW was ultimately 100 days late in completing the project.
To Nicole's surprise, at the completion of the project, Justin sent her an email which stated that pursuant to the contract, as BTW was 100 days late in completing the project, BTW now had to pay Storeit the sum of $100,000. Nicole sent Justin an email in reply which stated that his claim was nonsense because he told BTW it didn't have to complete the project within the specified time.
Advise Nicole on the following:
(a) Did BTW breach the contract by failing to complete the project within 25 weeks?
(b) Is BTW required to pay Storit $100,000 under the contract?
(c) Can BTW enforce Justin's promise that it did not have to complete with project within 25 weeks?
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