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Mr Bolero is keen to build his dream home. Bob the Builder provides Mr Bolero with a quote to build his house, which states that:
• Consideration for building the house is $600,000, half to be paid up front and the other half at completion.
• Bob must build the house according to the attached plans.
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• Bob must obtain an architect’s report within 12 months of execution of the contract confirming that the house has been constructed according to the plans without any major deficiencies.
• Completion to occur 10 business days after Bob provides a copy of the architect’s report to Mr Bolero.
The schedule of work attached to the quote indicates that building work will take place from 6 am to 6 pm, 6 days per week for every week of the 12 month period. The quote notes (incorrectly) that section 56 of the House Building Act 2001(WA) permits building work to be undertaken in any place at any time without a member of the public being entitled to obtain an injunction to stop the work.
Mr Bolero accepts the quote. However, an affected neighbour, Suzanne Teoh, obtains an injunction (despite section 56 of the House Building Act 2001(WA)), which prevents Bob from carrying out building works before 7.30 am. This means that to complete the contract within 12 months, building works will have to be undertaken from 7.30 am to 7.30 pm 6 days per week, despite the fact that working from 6pm to 7.30pm poses safety risks to Bob and his workers due to decreased light, as well as requiring Bob to pay above overtime rates to his workers. This would result in Bob breaking even or making a small loss, rather than making a $60,000 gain on the contract.
However, Bob continues building the house and does obtain an architect’s report, which confirms that there are no major deficiencies, but that Bob has painted the feature wall the wrong colour as the low light conditions meant he didn’t use the right tins of paint. Mr Bolero tells Bob that, due to the paint colour, he is “not satisfied with the report”.
(a) Assuming, at this stage, there has not been a breach of contract, Is Mr Bolero required to pay the remaining $300,000 to Bob?
(b) Has Mr Bolero breached the contract?
(c) Can Bob obtain damages and, if so, how much? Assume that for every day Mr Bolero is late in paying Bob, Bob must pay his workers a late payment fee of $100 each.
Assume that the six elements required for a contract to be valid are all present and assume that the House Building Act 2001(WA) exists. Ignore estoppel.
A’s to argue from Mr Bolero’s point of view.
B’s to argue from Bob’s point of view.