LO1 Critically evaluate the legal principles of real estate and construction practice.
LO2 Critically appraise a range of factual and legal material to identify a logical solutions to a problem with a reasoned, professional view.
LO3 Critically analyse complex information and legal terminology.
LO4 Critically appraise complex information from a range of appropriate sources, to develop reasoned legal alternatives.
Scenario
In October, Eric engaged his long-time friend Ernie a builder, to construct a single-storey dining- room extension to the rear of Eric’s house. They agreed on a price of £50,000 for the work. Eric stipulated that he wanted the extension built by the beginning of
December so that he would have time to decorate before Christmas. Eric explained to Ernie that this was because his mother’s 100th birthday fell on Christmas Day and he was planning to host a large family reunion on Christmas Day to celebrate.
Eric also set aside £10,000 of savings to pay for the flooring, decorative materials and furnishings for the new extension.
Shortly after commencing the work Ernie discovered that the soil being excavated for the foundations was of a heavy shrinkable clay type with high water table levels.
As a result, deeper foundations than originally anticipated were required by the local authority building inspector. The extra depth necessitated the diversion of a sewage pipe that ran close to the extension.
Ernie informed Eric that he would not be able to continue with the project unless Eric agreed to pay an extra £10,000 to cover the cost of both an additional labourer to help dig the foundations, lay concrete and divert the sewage pipe, and the additional materials. Eric reluctantly agreed to pay the extra £10,000 as he did not want to let his family down.
Ernie eventually completed the build by 1 December, as originally agreed.
Eric paid the £50,000 but is now refusing to pay the £10,000 as that will use up all his savings and he will not be able to afford to pay for the flooring, decorative materials and furnishings for the new extension.
Task
Critically evaluate the scenario above and using your knowledge of the law of contract, write an essay that advises Eric as to the enforceability of his agreement with Ernie regarding the £10,000.
