Precision Construction Ltd enters into a
contract to build a block of four apartments for Caitlin for $2,000,000.
Caitlin is very keen for the work to be completed by June 2024 as she has
already sold the apartments ‘off the plan’ (that is, before they are
constructed).
The construction company commences work but
realises that due to rising costs it will only be able to complete the
apartments on time at a financial loss. Thus, Precision Construction Ltd
approached Caitlin and asked for an additional $200,000 to do the job that it
was already contracted to do. Caitlin refuses to pay this extra amount. The
construction company then replies ‘Ok … but if you don’t pay us the extra
money, you can wait until Christmas and see how you deal with the owners of the
apartments for all of those delays.’
Caitlin then reluctantly agrees to pay the extra
money, and the construction company completed the apartments on time.
Which of the following statements is MOST CORRECT ?

Question

Precision Construction Ltd enters into a
contract to build a block of four apartments for Caitlin for $2,000,000.
Caitlin is very keen for the work to be completed by June 2024 as she has
already sold the apartments ‘off the plan’ (that is, before they are
constructed). 
 The construction company commences work but
realises that due to rising costs it will only be able to complete the
apartments on time at a financial loss. Thus, Precision Construction Ltd
approached Caitlin and asked for an additional $200,000 to do the job that it
was already contracted to do. Caitlin refuses to pay this extra amount. The
construction company then replies ‘Ok … but if you don’t pay us the extra
money, you can wait until Christmas and see how you deal with the owners of the
apartments for all of those delays.’ 
 Caitlin then reluctantly agrees to pay the extra
money, and the construction company completed the apartments on time. 
 Which of the following statements is  MOST   CORRECT ?

Answer

Had there been no threats made and had Caitlin agreed
to pay the $200,000, she would be likely to be bound by her promise, though
that is not the case here.

Answer

Caitlin is contractually bound to pay the
additional $200,000.

Answer

Since the promise is not in writing, Caitlin is
not required to pay the additional $200,000.

Answer

Caitlin is not required to pay the additional
$200,000 because Precision Construction Ltd was already under an existing
contractual obligation to complete the construction of the building.

Crowdly

Precision Construction Ltd enters into a contract to build a block of four apart...

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