COVID19 Restrictions on Social Gatherings & Mini-Diggers Ltd - Accounting Assignment Help

Assignment Task -

COURSEWORK QUESTION

Due to COVID19 restrictions on social gatherings imposed by the Government, Sara became worried that she may not be able to host her entire family and friends for Christmas due to the size of her house. She decided to have a conservatory built at her house to provide extra space for her guests on Christmas day. She saw one in her local newspaper advertised by Paul for £20,000. Sara called Paul and asked: “Would you accept £18,000 and would the price include installation?” Paul replied by saying: “It is yours for £20,000 including installation.” Paul was paid £10,000 as a deposit on 20^th November and the balance to be paid upon completion by 20^th December.

The following week, Paul started on the work but soon fell behind schedule due to a lot of rock and stone in the ground. When Sara asks about progress, Paul informs her that due to hard rock and stones, laying the foundation for the conservatory is very difficult without using a mini-digger. He asks Sara for an extra £5000 to hire a mini-digger as he did not have one. Worried that she may not be able to host her family and friends at Christmas if the conservatory is not completed on time, Sara reluctantly agreed to pay Paul the extra £5000 provided he completes the work on time.

Paul hired the mini-digger from Mini-Diggers Ltd for £5000 for 1 week, worked longer hours, and completed the work on time, by 20^th December. When Paul asks Sara for the balance of £10,000 and the £5,000 for the mini-digger hire, Sara tells him that she will only pay the balance of £10,000 as that was the originally agreed price for the whole job and that he did nothing more than he was originally contracted to do.

Mini-Diggers Ltd has sent Paul the invoice of £5000 for mini-digger hire but Paul has refused to pay to say that it is Sara who ordered him to hire the mini-digger, so she should pay.

1. Advise Paul whether Sara is in breach of contract and whether he can enforce the promise of the extra £5000
2. Advise Paul and Sara on who is liable for the £5000 contract with Mini-Diggers Ltd.

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