Reference no: EM132222887

Community College decides to build a new classroom building directly across from the CBI Building and enters into a contract with Nefarious Builders to manage the construction for $3.5 million dollars. The builders promise to have the building ready for classes in September. The contract includes a liquidated damages penalty of $5,000 for each day past the target opening date that the building is not ready. Two months into construction, Nathan Beelzebub, the owner of Nefarious, informs President Generals that while excavating the site, workers hit an underground spring which has since filled the foundation with water. He says it will cost an additional $200,000 to deal with the spring and the building will not be ready until October 15. President Generals orally agrees to pay the additional $200,000. When the building is finished in October, Nefarious submits a bill for $3.7 million to the College's business office. The College's attorney says the contract prohibited oral modifications and there was no consideration for the additional costs. She asks Nefarious for delay costs of $5,000 from the date the building was originally supposed to be ready in September. How do you resolve this mess and why?