Brown's Construction Co agreed to renovate a lecture hall at Moosehead University. The contract required the work to be done between July 1 and September 1 so that classes would not be disrupted. The contract also stated that Brown's would be required to pay the university $10 000 per week for each week that the work ran over schedule. That part of the contract was intended to allow Moosehead to rent other premises for the purpose of holding classes off- campus in the event of a delay. In fact, the project was finished six weeks late. Because of an unexpected downturn in the economy, however, the university only had to pay a total of $20 000 to hold classes off- campus during the delay. Brown's Construction nevertheless may be required to pay $60 000.

Question

Quizplus · Accepted Answer

The contract stipulated a penalty of $10,000 per week for delays, regardless of the actual costs incurred by the university. Therefore, Brown's Construction is liable for the full $60,000 for the six-week delay.

Brown's Construction Co Agreed to Renovate a Lecture Hall at Moosehead