Most organizations have to deal with contracts may they be written or oral. Contracts are very important in the carrying out

Project 2Anushri ShahBMGT 38022nd February, 2015Submitted to: Prof. David WeiskopfProject 2Part I

Most organizations have to deal with contracts may they be written or oral. Contracts are very important in the carrying out of dealings. A contract is a legally binding agreement and the involved parties need to understand and carry out their duties in accordance to the contract. When one or both parties do not fulfill their duties as outlined in the contract, this results in a breach of contract.

The basis of contract breach under which the college sues the contractor is the contractor’s failure to meet the set completion duration. The college and the contractor had, in a signed document, agreed that the construction of the classroom building would be completed on the 7th August, 2013 but it was not completed until 21August, 2013. This was two weeks later than it was scheduled. The college based its breach of contract lawsuit on the fact that the contractor was not able to meet the set deadline.

A contract will usually create an obligation that should be fulfilled by the people or parties which have entered into the contract. In law, a party that does not fulfill an end of the bargain under a contract causes a breach of contract. When a party fails to perform in time, then there is a breach of contract

Due to the contractor’s late completion, the college had to lease a space in order to offer the scheduled fall classes there. This led to the college to incur 15000 dollar in the 3 weeks. This was a disruption to the plans by the college. A breach may be material or immaterial.

I think for this case compensatory damages will work to ensure that the college is in a position which would otherwise be if the contractor did not delay the construction process. The college had lost some dollars in trying to lease class space. This means that the case would be ruled in favor of the college because of the fact that the contractor did not meet the deadline set in the contract.

Part II

In the contract between the college and the contractor, both the parties in contract had performed a breach of contract. In this part we shall look at the case in the perspective of the contractor. The contractor had entered into a contractor with the college which needed the contractor to finish the construction within a given period of time, by 7th August, 2013. However the contractor was not able to achieve the set deadline therefore the construction led to a delay in the moving into the classes by the college.

On the other hand the college, in a signed agreement had agreed to pay the contractor $5250000 within a given duration of time. When the construction length took longer, the college was not willing to pay the contractor the additional 250000 dollars. This agreement was included in the contract and the college had the obligation to pay the contractor an additional $250000 on top of the $5000000 which had been previously signed.

For this matter, I think both compensatory and punitive damages would be imposed on the college due to the breach of contract. Compensatory damages are aimed at putting the non-breaching party in the position that they had been if the contract breach had not occurred. It is true that these compensatory damages will be imposed so as to compensate the contractors for their work.

I am of the opinion that the college needs to face punitive damages. These damages are meant to punish a wrongful part for the wrongful act. These are payments that a above and beyond the point that would fully compensate the non-breaching party. The college must pay punitive damages to the contractor because the college had breached a clearly easy and straight forward contract.

In my thinking, this case would be ruled in favor of the contractor because it is an enforceable contract. The contract clearly shows that the college agreed to pay the contractor an additional 250000 dollars due to increased price of bricks. However when the contractor delayed the completion of work and this made the college to withhold the additional 250000 dollars from the contractor. Withholding this money is a breach of contract by its own.