The cases at hand are basically examples of breach of contract and Mechanic’s lien. Given that the scheduled date of completion are May 1 and June 1, 2003 and the date of the filing of cases would be around August 1, 2004, it is safe to assume that the cases are filed well within the statutes of limitations regardless of what state the parties are in. This is due to the fact that the minimum state of limitation for the said cases is two (2) years. Given that the time involved does not exceed two years, the cases filed are valid.
Take into consideration the first case, that of the one filed by Mercury, Inc. (“Mercury”) against Gary Glider. This contract is binding and enforceable given the fact that both parties have a meeting of minds and are clear about each other’s obligations as provided for in the contract. It should be the Court’s decision to dismiss the case against respondent Gary Glider since there was no breach of contract made on his part. In fact, it is Mercury who made the breach when they finished the construction of Hangar A on August 31, 2003.
However, the case is one of Minor Breach given the fact that the constructions was accomplished and done according to Gary Glider’s specifications. Given that Mercury performed its part of the bargain but was delayed in its delivery, they should rightfully be paid for their services in accordance with the contract. Although it is true that Gary Glider asked Mercury to discontinue construction on April 20, 2003, about ten (10) days short of the deadline of construction, it did not show that a termination of the previous contract was done.
Moreover, it cannot be considered a verbal contract since it did not show that Mercury, as the other party to the existing contract, agreed to stop construction. The fact that they continued the construction and finished it on August 31, 2003 indicates that they did not follow the instruction of Gary Glider to stop work on Hangar A. The case being a Minor Breach however, Mercury should be paid its dues. The computation should however be done in a manner wherein the amount of money lost on the part of Gary Glider due to the delay in the construction of Hangar A of about four (4) months should be deducted from the amount in the contract.
Also, the computation should be according to damages. In the case of Hangar A, it being constructed in the vacant land of the gliderport Flyguy, no business was lost. There was a mention of the Hangar A housing vintage aircrafts but this is supposed to happen during the air show schedule March 20, 2004. Since Hangar A is ready way before that time, then Gary Glider is not yet entitles to any damages in actuality, even if Hangar A was constructed as scheduled, no business was to start yet.
On the part of Mercury however, they are entitled only to the sum of money that they actually spent on the construction of Hangar A. If Gary Glider had a good lawyer, the lawyer will be able to make the cost payable to Mercury $40,000 which is the actual money they spent before the agreed upon date of the construction as provided for in the contract. The lawyer can cite breach of contract for not paying the other $5,000 Mercury spent after the agreed upon date of May 1, 2003.
On the other hand, if the better attorney is the one handling the case for Mercury, then he could ask for $45,000 in damages citing Minor Breach of Contract and failure to comply in good faith, making his client justifiably deserving of the actual damages or costs that it actually incurred in the construction of Hangar A, be it according to schedule or not, since after all, Gary Glider will have possession of the constructed hangar where all the $45,000 was spent. Breach of contract happens when a party to a binding and enforceable contract fails or refuses to perform the obligations he has as provided for in the contract.
There are several degrees of breach of contract and one of them is the minor breach of contract. This was what was applied in the first case. A minor or partial breach, otherwise called an immaterial breach, happens when the party that is not at fault is there only to collect the actual amount of damages and not entitled to the performance of its obligations. Another case that can be filed by Mercury against Gary Glider would be the Mechanic’s Lien, which is also the case Subkor can file against the same respondent, being the subcontractor of Mercury.
A subcontractor is a person or firm that is awarded by a general contractor of a portion of an existing contract. Although the subcontractor is technically under contract with the general contractor, who in turn is in contract with the employer that needed the construction, they can run after the employer through the law of Mechanic’s lien. This law is applicable also to the general contractors and the suppliers of materials aside from the subcontractor, thus the right of Mercury to file a case against Gary Glider on this basis. A mechanic’s lien is a statute and in some state (i. e.
, California) a constitutional right, to seek guarantee of payment for the services rendered in connection with the construction of a property as provided for in the contract. Under this law, the landowner will not be able to get a clean title of the subject land until he pays the dues of the subcontractors. Applying this law on the Subkor case filed against Gary Glider, however, it is my conviction that the Court will still rule against Subkor. Based on the events that occurred, Mercury subcontracted Subkor on September 1, 2003. On this date, Subkor took over “all of Mercury’s rights” under Contract 2.
However, Mercury’s contract with Gary Glider at that time has already expired. The contract provides that by June 1, 2003, Mercury should have completed Hangar B. Therefore, unless there was a new contract signed extending the schedule indicated in the second contract, then it would have already expired by June 1, 2003. No indications of drafting a new contract with Subkor for the construction of Hangar B occurred. Subkor made a wrong judgment in continuing with the constructions despite unclear circumstances. However, with a good lawyer to back it up, Subkor may still collect the actual costs it incurred in the construction of Hangar B.
However, this amount will have to be subject to deductions. Gary Glider had Hangars A and B constructed in time for the March 20, 2005 air show. Since it is only Hangar B that was finished after that date, the computation of damages should only be with the lost business in Hangar B. Hangar B is an existing runway and has therefore stopped business during the time of construction. The computation should be the estimated amount of business lost from June 1, 2003 (agreed upon time of completion of Hangar B as provided for in the contract) to May 1, 2004 (actual completion of Hangar B).
Other amounts to be considered are lost business from the restaurant facility and the vendors that are supposed to be housed in Hangar B from June 1, 2003 to May 1, 2004. Lastly of all is the amount of business that Gary Glider would have gained if Hangar B would have been ready for the air show. If the $5,000 mentioned by Gary Glider includes all this, then $5,000 should be deducted from the total actual cost incurred by Subkor. If the amount stipulated in the contract is the actual cost as evidenced by receipts or invoices, then Subkor should get $65,000. If not, then they $5,000 should be deducted from the actual cost.
Works Cited Free Legal Advice Help. 2007. “Understand Breach of Contract or Agreements”. 12 May 2010. < http://www. freelegaladvicehelp. com/malpractice-law/breach-of-contract/Understand-Breach-Of-Contract-Or-Agreement. html>. Hartman, Francis T. Ten Commandments of Better Contracting. ASCE Publications, 2003. Peter, Elliot M. 1 October 2006. “Construction Law – Mechanic’s Lien Time Limit Expired”. 12 May 2010 <http://en. allexperts. com/q/Construction-Law-914/Mechanic-Lien-Time-Limit. htm>.. Walker, Anthony. Project Management in Construction. Blackwell, 2002.