Hector is a building contractor and entered into a contract on February 1, 2018 to build...
Hector is a building contractor and entered into a contract on February 1, 2018 to build a house for Lois for $350,000 with a completion date of July 1, 2018. Payments are to be made to Hector by Lois of $50,000 on the signing of the contract, $150,000 on April 1, provided the house is partially completed as defined in the contract, and $150,000 on July 1, 2018, when the house is fully completed. Lois is very clear that the house must be finished by July 1, 2018 because she will return from her honeymoon that day and needs to move in on that day. The original payment on July 1 and the partial completion payment on April 1 are made by Lois.
Lois is satisfied things are going well. However, she drives by the house on May 1 and is angry when it appears no one from Hector’s company is working and it doesn’t appear anything additional has been done since April 1. She contacts Hector, who admits that work has stopped on the house and that because of a shortage of skilled workers, he cannot complete the job by the deadline of July 1 without an additional payment from Lois of $20,000 so he can pay higher wages to get the needed qualified workers. Lois is incensed, but ultimately agrees to pay the $20,000 and Hector assures her it will be completed by July 1.
Hector completes the house on July 1, but Lois refuses to pay the final payment of $150,000 or the $20,000 on the additional agreement saying that Hector has breached the original contract by pointing out, among other things, that the garage floor of the house was to be painted with an abrasive blue paint and that the fixtures in two of the bathrooms did not meet the specifications of the contract. Hector used a similar, but less expensive abrasive paint in the garage and similar but less expensive bathroom fixtures. It is estimated that the less expensive items saved him about $3,000. Hector counterclaims for $170,000. Discuss all the issues associated with this scenario. Who should win the litigation between Hector and Lois and how much is the relief to be received?
Homework Answers
Add Answer to:
Hector is a building contractor and entered into a contract on
February 1, 2018 to build...
Bob Ltd signs a contract on 1 April 2018 to build an office building. The construction...
Bob Ltd signs a contract on 1 April 2018 to build an office building. The construction is scheduled to commence 1 July 2018 and the estimated date of completion is 30 June 2021. The cost of the building is estimated to be $155m and the total contract price is fixed at $180m. The following data relates to the construction period: For the year ended 30 June 2019 2020 2021 $’000 $’000 $’000 Costs to date 46,500 108,500 155,000 Estimated Costs...
On February 1, 2018, Arrow Construction Company entered into a three-year construction contract to build a...
On February 1, 2018, Arrow Construction Company entered into a
three-year construction contract to build a bridge for a price of
$8,060,000. During 2018, costs of $2,020,000 were incurred with
estimated costs of $4,020,000 yet to be incurred. Billings of
$2,520,000 were sent, and cash collected was $2,270,000.
In 2019, costs incurred were $2,520,000 with remaining costs
estimated to be $3,630,000. 2019 billings were $2,770,000 and
$2,495,000 cash was collected. The project was completed in 2020
after additional costs of...
1.Hometown Construction Corp. entered into a long-term contract to build an office building for Outsider Corp....
1.Hometown Construction Corp. entered into a long-term contract to build an office building for Outsider Corp. at a fixed contract price of $27.5 million on 6/15/2016. Construction of the building is completed on 12/15/2018. Hometown Construction expects the building to be completed in two and a half years and uses the Percentage of Completion Method (cost to cost approach) to account for the contract. Cost information related to the contract are as follows: 2016 2017 2018 Actual Construction costs incurred...
On February 1, 2018, Arrow Construction Company entered into a three-year construction contract to build a...
On February 1, 2018, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,000,000. During 2018, costs of $2,000,000 were incurred, with estimated costs of $4,000,000 yet to be incurred. Billings of $2,500,000 were sent, and cash collected was $2,250,000. In 2019, costs incurred were $2,500,000 with remaining costs estimated to be $3,600,000. 2019 billings were $2,750,000, and $2,475,000 cash was collected. The project was completed in 2020 after additional costs of...
On February 1, 2018, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,420,000. During 2018, costs of $2,140,000 were incurred with estimat...
On February 1, 2018, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,420,000. During 2018, costs of $2,140,000 were incurred with estimated costs of $4,140,000 yet to be incurred. Billings of $2,640,000 were sent, and cash collected was $2,390,000. In 2019, costs incurred were $2,640,000 with remaining costs estimated to be $3,810,000. 2019 billings were $2,890,000 and $2,615,000 cash was collected. The project was completed in 2020 after additional costs of...
On February 1, 2018, Arrow Construction Company entered into a three-year construction contract to build a...
On February 1, 2018, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,450,000. During 2018, costs of $2,180,000 were incurred, with estimated costs of $4,180,000 yet to be incurred. Billings of $2,716,000 were sent, and cash collected was $2,430,000. In 2019, costs incurred were $2,716,000 with remaining costs estimated to be $3,870,000. 2019 billings were $2,966,000, and $2,655,000 cash was collected. The project was completed in 2020 after additional costs of...
On February 1, 2018, Arrow Construction Company entered into a three-year construction contract to build a...
On February 1, 2018, Arrow Construction Company entered into a
three-year construction contract to build a bridge for a price of
$8,125,000. During 2018, costs of $2,050,000 were incurred, with
estimated costs of $4,050,000 yet to be incurred. Billings of
$2,560,000 were sent, and cash collected was $2,300,000. In 2019,
costs incurred were $2,560,000 with remaining costs estimated to be
$3,675,000. 2019 billings were $2,810,000, and $2,525,000 cash was
collected. The project was completed in 2020 after additional costs
of...
On June 15, 2018, Sanderson Construction entered into a long-term construction contract to build a baseball...
On June 15, 2018, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington, D.C., for $390 million. The expected completion date is April 1, 2020. lust in time for the 2020 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are as follows ($ in millions): Costs incurred during the year Estimated costs to complete as of December 31 2018 2019 2020 $ 60 $130 $70...
On February 1, 2016, Arrow Construction Company entered into a three-year construction contract to build a...
On February 1, 2016, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,000,000. During 2016, costs of $2,000,000 were incurred with estimated costs of $4,000,000 yet to be incurred. Billings of $2,500,000 were sent, and cash collected was $2,250,000. In 2017, costs incurred were $2,500,000 with remaining costs estimated to be $3,600,000. 2017 billings were $2,750,000, and $2,475,000 cash was collected. The project was completed in 2018 after additional costs of...
On June 15, 2018, Sanderson Construction entered into a long-term construction contract to build a baseball...
On June 15, 2018, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington, D.C., for $360 million. The expected completion date is April 1, 2020, just in time for the 2020 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are as follows ($ in millions): 2018 2019 2020 Costs incurred during the year Estimated costs to complete as of December 31 S 30 140 $40...
On February 1, 2018, Arrow Construction Company entered into a
three-year construction contract to build a bridge for a price of
$8,060,000. During 2018, costs of $2,020,000 were incurred with
estimated costs of $4,020,000 yet to be incurred. Billings of
$2,520,000 were sent, and cash collected was $2,270,000.
In 2019, costs incurred were $2,520,000 with remaining costs
estimated to be $3,630,000. 2019 billings were $2,770,000 and
$2,495,000 cash was collected. The project was completed in 2020
after additional costs of...
1.Hometown Construction Corp. entered into a long-term contract to build an office building for Outsider Corp. at a fixed contract price of $27.5 million on 6/15/2016. Construction of the building is completed on 12/15/2018. Hometown Construction expects the building to be completed in two and a half years and uses the Percentage of Completion Method (cost to cost approach) to account for the contract. Cost information related to the contract are as follows: 2016 2017 2018 Actual Construction costs incurred...
On February 1, 2018, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,000,000. During 2018, costs of $2,000,000 were incurred, with estimated costs of $4,000,000 yet to be incurred. Billings of $2,500,000 were sent, and cash collected was $2,250,000. In 2019, costs incurred were $2,500,000 with remaining costs estimated to be $3,600,000. 2019 billings were $2,750,000, and $2,475,000 cash was collected. The project was completed in 2020 after additional costs of...
On February 1, 2018, Arrow Construction Company entered into a
three-year construction contract to build a bridge for a price of
$8,125,000. During 2018, costs of $2,050,000 were incurred, with
estimated costs of $4,050,000 yet to be incurred. Billings of
$2,560,000 were sent, and cash collected was $2,300,000. In 2019,
costs incurred were $2,560,000 with remaining costs estimated to be
$3,675,000. 2019 billings were $2,810,000, and $2,525,000 cash was
collected. The project was completed in 2020 after additional costs
of...
On June 15, 2018, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington, D.C., for $390 million. The expected completion date is April 1, 2020. lust in time for the 2020 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are as follows ($ in millions): Costs incurred during the year Estimated costs to complete as of December 31 2018 2019 2020 $ 60 $130 $70...
On June 15, 2018, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington, D.C., for $360 million. The expected completion date is April 1, 2020, just in time for the 2020 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are as follows ($ in millions): 2018 2019 2020 Costs incurred during the year Estimated costs to complete as of December 31 S 30 140 $40...
Most questions answered within 3 hours.
-
Where is the error in this code sequence?
String s1 = "Hello";
String s2 = "ello";...
asked 10 months ago -
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
asked 10 months ago -
Consider this reaction:
Al2(SO4)3 (aq)+ BaCl3
(aq) Al2Cl6 (aq)- +
3BaSO4(s) . What is the...
asked 10 months ago -
Suppose that Savneet is considering increasing her
recent random sample from 20 car rentals to 40...
asked 10 months ago -
Trucks arrive at an unloading terminal at an average rate of 120
per hour.
Trucks arrive...
asked 10 months ago -
Why are methanol and ethanol completely soluble in water while
octanol is not very little soluble....
asked 10 months ago -
A facilities manager at a university reads in a research report
that the mean amount of...
asked 10 months ago -
When the CuSO4 is rehydrated by adding water to the anhydrous
compound, is this an endothermic...
asked 10 months ago -
A ray of sunlight is passing from diamond into crown glass; the
angle of incidence is...
asked 10 months ago -
A block of mass 0.249 kg is placed on top of a light, vertical
spring of...
asked 10 months ago -
how do the kidneys compensate in the presences of acidosis
a) trigger hyperventilate
b) reserve acid...
asked 10 months ago -
Question 501 pts
The rental rate of capital to the firm increases. Which of the
following...
asked 10 months ago