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Associated Builders, Inc., provided labor and materials to William M. Coggins and Benjamin W. Coggins, doing business as Ben & Bill’s Chocolate Emporium, to complete a structure on Main Street in Bar Harbor, Maine. After a dispute arose regarding compensation, Associated and the Cogginses executed an agreement stating that there existed an outstanding balance of $70,000 and setting forth the following terms of repayment: It is agreed that, two payments will be made by the Cogginses to Associated Builders as follows: Twenty Five Thousand Dollars ($25,000.00) on or before June 1, 2105, and Twenty Five Thousand Dollars ($25,000.00) on or before June 1, 2016. No interest will be charged or paid providing payments are made as agreed. If the payments are not made as agreed, then interest shall accrue at 10% per annum figured from the date of default. It is further agreed that Associated Builders will forfeit the balance of Twenty Thousand Dollars and No Cents ($20,000.00) providing the above payments are made as agreed. The Cogginses made their first payment in accordance with the agreement. The second payment, however, was delivered three days late on June 4, 2016. Claiming a breach of the contract, Associated contended that the remainder of the original balance of $20,000, plus interest and cost, were now due. b. What arguments would support the claim by the Cogginses that they were not liable for $20,000? c. For what damages, if any, are the Cogginses liable? Explain. |
Explanation
Individual A is going to authorize $20,000 added interest and cost. If the payments are not made on time, the contract can be cancelled. The focus of time should be the payment due.
Verified Answer
Individual A can argue that:
Concentrate on time
Delay in payment is a material breach
Damages can be recovered either by revoke or by original contract.
Explanation
The execution of the accord depends on the satisfaction of the builders. There is bad faith because the last payment is delayed by Individual C. The purpose and the language of the accord does not suggest that time is the essence.
Verified Answer
Individual C can argue that:
Late payment does not revoke the accord.
Individual C has a liability for the revocation and not for the original contract.
Individual C has a liability for interest payment at the rate of 10% per annum.
Explanation
The settlement was done after a certain period of time by Company C because of some financial issues, which were explained to the other party. The delay was only in terms of time, and all the amount will be returned to the respective party despite being late.
Therefore, Company C is not liable for any further damages to the other party as the damage caused was due to delay in time. Late payment by Company C was not intentional, and for this reason, there is no pending further liability.
Verified Answer
Company C made all the payments. However, after some time, they cannot be held liable for any further damages as the damages were made on the basis of time and not on intentions or money.
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