CONSTRUCTION & PROJECT MANAGEMENT ENMGT 652 WINTER 2016 PLOTNICK
Fact Pattern for Questions
For each question you will be given a fact pattern, and then asked a series of questions related to the facts supplied. You should not add to the facts except as absolutely necessary to permit your answer. If you do add facts, state the facts added prior to your answer. Points will be deducted for added facts unless the question was incorrectly asked.
A model answer will contain a statement of each cause of action (e.g. CONTRACT: Anticipatory Breach,) the elements of the cause of action (e.g. CONTRACT: Offer/Acceptance…, notice of intent not to perform…,) a statement of each question of fact, your decision relating to this question of fact, and its legal consequences. Additional credit may be obtained by relating the legal consequences of the alternate conclusion as to a question of fact; however, there is a maximum number of points assigned to each question — it is better to answer all questions adequately than to overwrite on one.
FACT PATTERN FOR QUESTIONS 1 AND 2
Engineer E and Owner O are engaged in contract negotiations for E to design and build a building for O. The proposed contract is for $150,000. The estimated duration of the turnkey project is 15 months.
After reaching an oral agreement of the above, O tells E that they should get together over the next few weeks to hammer out the contract language details for a formal written contract. E proceeds and completes approximately 30% of the design work (at a cost of $3000) when negotiations break off over “technicalities.” O orally tells E to stop work as they cannot reach an agreement. E’s budget estimated a $12,000 profit for E for the project. Assume for this question that the design/build turnkey project is NOT severable.
- E sues O for the entire $150,000. Who wins, what, and why?
- ADDITIONAL FACTS: O mails a check for $3,000 to E with a letter stating that the check is “to cover your costs for the work performed under our canceled agreement for the $150,000 project.” E sues O for the remaining $147,000. O countersues asking for the return of the $3,000. Who wins, what, and why?
FACT PATTERN FOR QUESTIONS 3 – 5
Architect A and Owner O, who is a small Christian College, sign a contract under which A agrees to prepare a preliminary design for a new campus dormitory. The contract states that if the design is to the liking of the Dean of Housing H, the Architect A shall be given a further contract to prepare the complete design for the dormitory in return for a $200,000 fee. Should H not like the preliminary design, A would be given $100 and the contract terminated.
B, another architect who would like the job, tells H that A is a practicing Buddhist although B knows A is actually a Baptist. B also shows H photographs taken with a telegraphic lens from B’s plane, of a private party at A’s pool where a number of guests were naked.
Shortly thereafter, A presents H the preliminary plans. Without opening the sealed envelope, H hands A a check for $100 stating, “I don’t care what is on your plan! No hedonistic heathen will design a dorm for our school…” and related the information which he received from B.
- What rights does A have against B? Why? What range of result (high/low) do you expect A will win?
- What rights does A have against H? Why? What range of result (high/low) do you expect A will win?
- What rights does A have against O? Why? What range of result (high/low) do you expect A will win?
FACT PATTERN FOR QUESTION 6
Atlas Manufacturing contracts with Cheap Construction Co. to erect a new factory building. The contract provides a lump sum payment of $100,000 to Cheap at the completion of the project. The project is expected to be completed in ten months. Cheap’s estimated cost is $90,000. The contract provides that Atlas must advance funds to cover the agreed, or estimated cost of any change orders.
Cheap’s performance is guaranteed by Baker Bonding Company. Atlas and Cheap are jointly covered by an All-Risk Insurance Policy issued by Iroquois Insurance Company. The policy covers the cost of repair or replacement, but not profit for such remedial work, nor the increased cost of the remaining work due to delay.
Due to the provable negligence of Cheap, a fire completely destroys the job when it is 50% complete, and six months have elapsed. (Estimated value at $50,000, including profit.) The following sequence of events next occurs:
As Cheap is financing the project during the now extended period of construction, and as costs have increased, Cheap claims that this unforeseen event is a change order. It is stipulated that Cheap’s cost to complete the project would have been an additional $120,000 (not including profit.) Atlas refuses to advance any funds towards this claim. Cheap therefore refuses to continue work.
Atlas calls in Baker, who, after checking several competitive bids, contracts with Spendthrift Construction to perform Cheap’s scope of work, for $175,000. Spendthrift’s estimated cost is $140,000. It is stipulated that the cost of demolition and clearing of the fire ravaged structure is exactly offset by the value of the salvageable materials and works (such as foundations) which survived the fire.
Iroquois refuses to pay on the policy due to the provable negligence of Cheap. Atlas refuses to pay Cheap for work done to date. Cheap sues Atlas and Iroquois for his $50,000 (including $5000 profit for the first 50% completion.) Cheap additionally sues Atlas for $5000 as anticipated profit on the second half of the project. Atlas and Baker sue Iroquois and Cheap for the $75,000 overrun. All additionally possible suits are filed.
Q6. DISCUSS what each party wins and/or pays, and why.
Include this table:
PARTY Receives Pays
Atlas $ from $ to
Baker $ from $ to
Cheap $ from $ to
Iroquois $ from $ to
Spendthrift $ from $ to
FACT PATTERN FOR QUESTION 7
Two twelve year old children are playing at one child’s home when they find that the parents have accidentally left unlocked the cabinet in which a loaded gun is kept. One child carefully shows the other how the clip is removed, making the gun “safe.” He demonstrates by pointing the gun at his friend and pulling the trigger. The bullet in the chamber (not in the clip) severely injures his friend.
Prepare an expert engineer argument for the court on why or why not the gun’s manufacturer should be held responsible for a “defectively designed product.” Limit to one-half page. ANSWER WHY OR WHY NOT — NOT BOTH
DO NOT INCLUDE 2ND AMENDMENT CONSIDERATIONS (stripping the Court of power to decide this matter based upon common law) IN YOUR ANSWER. (HINT – treat this the same as you would a nail gun or staple gun. Pretend that the family lives in Canada but bought a gun manufactured in the U.S. This is an ENGINEERING product liability law question. There are two correct answers based solely upon the engineering – 2nd Amendment is not one.)
FACT PATTERN FOR QUESTIONS 8 & 9
Q8. A owns lot I and II. B owns lot III. A sells lot II to B. Note Lot II and Lot III are separated by Old Mill Stream.
No mention is made of an easement right across lot I. Does B have any such right?
Q9. B lives on lot III. C lives on lot IV. B, with C’s written permission, has been regularly crossing lot IV to fish in the lake for the past 25 years. Recently, B and C argued, and C orally told B that he no longer has a right to cross his land. What rights, if any, does B have?
Q10. While visiting Tenant T’s office, visitor V trips and injures herself in a hole in the floor in the private (nonpublic) portion of the office hastily covered by Tenant T. Landlord L had knowledge that the floor required repair and had already arranged to send a contractor to effect same the next week.
What rights does V have against Landlord L; against Tenant T?
Q11. Upon moving in to a new office (in an older building,) Engineer E installs overhead fluorescent lighting, at a cost of $10,000, removing and discarding the existing cut glass incandescent fixtures. During the term of the lease, Landlord L visits the office and observes the lights. At the expiration of the three year lease, E leaves the new lights, demanding $4,000 to cover the non-amortized cost of this five year property. The landlord replies by demanding all remedies provided at law. The cost to replace the original fixtures is stipulated at trial by both parties to be $10,000 including $7,000 for materials and $3,000 for labor including removal of the new fluorescent fixtures. If the new fluorescent lights are removed, the fixtures have a salvage value of $5,000. A real estate expert testifies that the office with the new fixtures should rent $200 per month more than with the old fixtures.
Who wins, how much, and why?
Q12. A and B are neighbors. After numerous complaints by B regarding A’s dog, A erects a fence enclosing her property. The fence encroaches upon three feet of B’s property and it can be proven that A knew of the encroachment at the time the fence was erected. Twenty-two years pass before the error is discovered by B when B is preparing to sell his property.
What rights does B have against A?
Q13. A advertises for bids. The terms of the bid request require bidders to post a bid bond for $10,000. B submits a bid for $500,000. C submits a bid for $520,000. A awards the contract to B, but B refuses to sign or perform. A then awards the contract to C.
What rights does A have against B? Against B’s bid bonding company?
