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Project Procurement Management Case Study
On 1st October 2018, James had signed a booking proforma for the pucrhase of an oil rig with an onwer, Jericho. The proforma expressly states that when the purchaser opted to purchase the oil rig, the parties should thereafter sign the sale and purchase agreement. In 1st December 2018, the government had raised the price of petrol by 40% and this had caused prices of oil rigs to increase as well. Since then, the economy went through a very serious crisis that had caused the whole oil and gas unesconomic and great loss to the owner. On 15th December 2018, Jericho sent a letter to James terminating the sale and purchase agreement for reason of frustration caused by the economic crisis. James refused to accept the termination arguing that economic down turn was not a frustrating event.
Based on the case above, discuss the followings in an essay format:
1) Was the booking proforma a contract?
2) Does "economic crisis" considered a frustration to the contract?
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