Principle of contract law

‘The January Contract’BIQ and S Ltd entered in” rel=”nofollow”>into a contract in” rel=”nofollow”>in January 2016 for the wirin” rel=”nofollow”>ing of a branch of the Northwest Bank at a price of £86,000. The contract also provided that S LTD would complete all work by 6 June 2016.
BIQ’s contract with the Northwest Bank for the buildin” rel=”nofollow”>ing of the branch in” rel=”nofollow”>in question provided that the work would be completed by 22 September 2016. It also provided that BIQ should be subject to a penalty of £50,000 for each week after 22 September that it failed to complete the work agreed.
By mid-May it became clear that S Ltd was not workin” rel=”nofollow”>ing sufficiently quickly to complete the work in” rel=”nofollow”>in the time agreed. BIQ therefore promised to pay S Ltd an extra £30,000 to complete the work by the date provided in” rel=”nofollow”>in the January Contract.
S Ltd consequently worked more quickly and completed the work in” rel=”nofollow”>in the time agreed.
‘The May Contract’
The second contract between BIQ and S Ltd was entered in” rel=”nofollow”>into on 7 May 2016. It provided that S Ltd should in” rel=”nofollow”>install wirin” rel=”nofollow”>ing to ‘Firtree’ (a private house that BIQ had contracted to build for a private client). The price agreed between BIQ and S Ltd was £35,000. The date agreed for BIQ to complete the work was 4 August 2016. BIQ had not been made subject to any late completion penalty clauses in” rel=”nofollow”>in its contract to build ‘Firtree’.
In July, BIQ again” rel=”nofollow”>in decided that S Ltd was workin” rel=”nofollow”>ing too slowly to complete the work by 4 August 2016. BIQ consequently promised to pay S Ltd a further £15,000 to complete the work on time as agreed in” rel=”nofollow”>in the May Contract.
BIQ subsequently discovered that as soon as it promised to pay extra to ensure compliance with the January Contract for the wirin” rel=”nofollow”>ing of the Northwest Bank, S Ltd withdrew all its workers from ‘Firtree’ and put them to work on a contract for another customer, thus ensurin” rel=”nofollow”>ing that the May Contract would not be completed on time.
BIQ thin” rel=”nofollow”>inks S Ltd has behaved dishonestly and is now refusin” rel=”nofollow”>ing to honour either of its promises to pay S Ltd extra money if the work was completed on time.
Advise BIQ on whether:
1. (a) S Ltd can enforce BIQ’s promise to pay an extra £30,000 for completin” rel=”nofollow”>ing the work on the January Contract within” rel=”nofollow”>in the time origin” rel=”nofollow”>inally agreed.
2. (b) S Ltd can enforce BIQ’s promise to pay an extra £15,000 for completin” rel=”nofollow”>ing the work on the May Contract within” rel=”nofollow”>in the time origin” rel=”nofollow”>inally agreed.

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