Ramirez was a general contractor who specialized in the building of small commer
ID: 367105 • Letter: R
Question
Ramirez was a general contractor who specialized in the building of small commercial buildings. He entered into a contract with Nguyen to build a commercial building in a small retail shopping center. The contract had the following clause: In the event that the builder is late in delivering the building, ready for occupancy, builder will suffer a reduction in contract price of $1500 per day for each day beyond the agreed upon completion date. Completion was scheduled in the contract for December 1 of the current year. The total price of the building was $1,500,000. As of October of the current year the buyer had made payments of $1,200,000 as agreed upon and was due to pay the final $300,000 on the day the building was completed. Ramirez was unable to deliver the building until December 15; 14 days after the agreed upon delivery date. He suffered from a late supplier who held him up for three days and from a worker’s strike that held him up for 11 days. Nguyen paid all of the last payment except for $21,000 for the delayed delivery. Ramirez believes he is entitled to the full amount and has initiated this suit.
Explanation / Answer
In this Ramirez will not be entitled to full amount as the contract specifically said that if Ramirez failed to deliver the building in time then he will suffer the reduction of 1500 dollars per day for each day. Ramirez thinks that he should be given entire amount because the factors which led to dekh in delivery were beyond the control of Ramirez. However, the contract did not mention as to when he will not be liable for delay in delivery, in the contract the terms are "in the event that the builder is late in delivering the building ,ready for occupancy", there is no provision what so ever for any circumstance when Ramirez would be liable to be fully paid inspite of delay in delivery.
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