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?