Engaement Letter

Alexander Architects, Inc., was the project manager for the construction of an apartment complex involving 380 units. Bradednham Partners had hired the Alexander firm to oversee construction in accordance with very specific plans and specifications. Prior to the final payment of $50,000, Bradenham partners learned that the Alexander firm had inadvertently approved the use of 33 windows which were several inches narrower than called for in the plans. Bradenham Partnership had paid Alexander Architects $350,000 up to this point. Under the circumstances, Alexander Architects, Inc.,

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A is in material breach and is therefore not entitled to any further payment, but may retain what it has been paid.

B is in material breach and is therefore not entitled to any further payment and must return what it has been previously paid.

C is in minor breach and is therefore not entitled to any further payment, but may retain what it has been paid.

D is in minor breach and is therefore is entitled to the $50,000 payment, minus damages.

The correct answer was D.

Alexander Architects has substantially performed the contract and therefore, even though it is in breach of contract, it is entitled to recover under the contract. Since it has committed a minor breach, Alexander Architects is entitled to the final payment, less damages. The fact that damages may be difficult to calculate does not affect the underlying rights of the parties.

Harvey Marine Supply, Inc., in a written and signed contract with Williams, agreed to supply Williams all the fuel for his three ship fleet for the upcoming Codfish season at a price of $2.99 per gallon. One week prior to the start of the season, Harvey Marine Supply, Inc., faxed Williams a note stating that “Due to the age of our fuel storage tanks, we will not be selling any fuel during the upcoming cod season. We apologize for any inconvenience.” Which of the following...