Brown's Construction Co agreed to renovate a lecture hall at Moosehead University.The contract required the work to be completed between July 1 and September 1 so that classes would not be disrupted.The contract also stated that Brown's Construction would be required to pay the university $10 000 for each week that the project ran over schedule.That provision was intended to allow Moosehead to rent other premises for the purpose of holding classes off-campus if Brown's Construction failed to perform on time.The amount of $10 000 per week was the parties' genuine estimate of the cost of leasing lecture space off-campus.In fact, the renovations were 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 stated that Brown's Construction would be required to pay $10,000 for each week that the project ran over schedule, and the renovations were finished six weeks late. Therefore, Brown's Construction may be required to pay $60,000 ($10,000 x 6 weeks). The fact that the university only paid $20,000 to hold classes off-campus during the delay does not affect Brown's Construction's obligation to pay the agreed-upon amount for running over schedule.

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