Substantial profit on the sale

Assignment Help Accounting Basics

Reference no: EM13969570

Caroline's house was badly damaged by storms in March. She engaged David, a builder, to repair the damage. David told Caroline that the work would cost £10,000 and would be finished by 1 June. Caroline accepted David's terms because she wanted to be able to put the house up for sale in June.

David started work on the repairs to Caroline's house in April, but further storms delayed the work. Four weeks later David approached Caroline asking her to increase the contract price to £15,000 due to increased overtime costs David would face to meet the deadline of 1 June. Reluctantly Caroline agreed.

David completed the repair before the end of May and sent Caroline a bill for £15,000. However, Caroline informed David that she could only afford to pay £10,000 because she was in financial difficul- ties. David, fearing that he would otherwise receive no payment at all, reluctantly accepted £10,000 in full settlement.

David has now discovered that Caroline has made a substantial profit on the sale of her house and is about to depart on a round-the-world holiday.

Advise David on whether he can recover the rest of the money.

Reference no: EM13969570

Questions Cloud

Summarize the important points of the case for the class : Summarize the important points of the case for the class. You should assume that the class is not familiar with the case.

Different kinds of contracts : For each of the examples given below identify: (a) the different kinds of contracts described; and

Problem regarding the terms of a contract : 1. To what extent, if at all, is it possible to bind or benefit a person under the terms of a contract to which he or she is not a party?

Draw a graph, label the axes and identify the market : Draw a graph, label the axes and identify the market that the graph is depicting and explain in words how either the demand or supply curve moves given the discussion in the article.

Substantial profit on the sale : David has now discovered that Caroline has made a substantial profit on the sale of her house and is about to depart on a round-the-world holiday.

Discuss the concept of perceived value and its importance : Discuss the concept of perceived value and its importance to consumer behaviour and marketing. Discuss the theory and then give practical examples of how customers perceive various brands and how this impacts on their behaviour.

Lack of intention to create a legal relationship : 1. Explain the circumstances in which the courts will refuse to enforce agreements as contracts because of a lack of intention to create a legal relationship.

Considerable investment in tour : Eric, who has made a considerable investment in this tour, wants to know what remedies are available to him.

Calculate specific growth rates and trends in u.s. economy : Accurately analyzes the annual GDP during the time frame to calculate specific growth rates and trends in the U.S. economy, and provides information in speaker notes

User Account

All Pages