Reference no: EM133935395

Question

Dave Developer entered into a signed detailed written contract with Clive Contractor for the construction of a concrete foundation for the new hotel Dave is building. The contract provides that Clive will complete the concrete foundation (in accordance with detailed drawings) at a fixed contract price of $250,000. Although they didn't discuss it, both parties assumed the excavation could be accomplished with earth-moving equipment without the need to do any blasting. However, a few days into the job, Clive discovered bedrock five feet below the surface. The bedrock needs to be blasted in order to complete the project as planned. This is significantly more expensive than anticipated. Based on this, Clive called a meeting with Dave to advise him of this newly-discovered problem. Clive told Dave he can still complete the project as planned and on time, but due to the newly-uncovered bedrock, it will cost an additional $50,000. Dave refused to authorize the additional $50,000 contract price requested by Clive. Clive then advised Dave that he was rescinding the contract and he returned the property to the condition it was in before he started work. Dave is threatening to sue Clive to enforce the terms of that $250,000 construction contract.

Is the fixed price contract for $250,000 enforceable under these circumstances? Explain your answer being sure to identify and apply the governing legal principle.