Case Scenario:
The Dream House
In a contract dated June 15, 2006, Bobby agrees to build your dream house on a lot you own near Naples, Florida. The contract price is $500,000. The house is to be completed and ready for occupancy by March 1, 2007. Bobby is paid a progress payment of $100,000, for labor and materials, in October, 2006. In November, 2006, a hurricane strikes the Naples area and floods the work site. Bobby claims he had completed 50% of the job before the hurricane struck. Thereafter, Bobby performs no further work and walks off the job.
On January 1, 2007, you declare Bobby to be in breach of contract and sign a contract with Sheila to complete the job for $350,000. Was your contract with Bobby a unilateral or bilateral contract; if unilateral, at what time did Bobby substantially undertake performance? What remedies and/or damages are available to you and to Bobby? Since Sheila’s cost to complete the house is more than half the cost, who sees a loss from the hurricane?