Question

In: Accounting

1. Superior Paver sued homeowners Pamela and Mark for $14,350 it claimed was still owed as...

1.

Superior Paver sued homeowners Pamela and Mark for $14,350 it claimed was still owed as extra work incurred in installing concreate pavers in the driveway of their residence. Pamela and Mark had previously paid the $45,000 contract price, and they counterclaimed for $60,500 for the reasonable cost of making the contractor’s work conform to the contract. The evidence established that Superior did not install a proper base of 3” to 4” of crushed limestone before installing the pavers as required by the contract, which caused the pavers to move creating gaps between the pavers and causing water to flow into the garage. To correct the problem the pavers needed to be removed and the area excavated and replaced with a crushed limestone base before, again, installing the pavers. Superior claimed it had substantially performed the contract as their performance resulted in a fully usable driveway, and, the proper remedy, if any, was the reduction of the market value of Pamela and Mark’s property due to any defective performance. Superior further asserted that the cost of redoing the entire job would be economic waste.

The result?

2.

A franchisee owner (Owner) of a popular hotel chain was bound by their franchise agreement with Mega Hotel Inc (Mega). Part of Owner’s obligations included that Owner maintain their 60 room hotel to at least minimum quality assurance standards. Owner’s hotel failed five consecutive quality inspections over two years, with the inspector noting damaged guest rooms, burns in the bedding, and severely stained carpets. Mega canceled the franchise agreement. Owner sued Mega for wrongfully canceling the agreement (breach of contract).

Owner’s defense against Mega cancelling the franchise was the following. The bridge repairs on the road leading to the hotel had adversely affected the hotels ability to live up to the franchise agreement. Further, the repairs made it commercially impractical for Owner to live up to the franchise agreement. For reasons such as the inability of hotel staff to arrive on time and properly clean the rooms. Will Owner’s defense prevail?

Solutions

Expert Solution

1. Issue involved was whether case filed by Superior paver for payment due from homeowners Pamela and Mark is actually justified. Also, the claim raised by the homeowners stands valid?

As per Contract Act, the contractor (superior paver) was supposed to complete the contract as per the conditions mentioned in. If the contractor does not perform the work assigned with respect to the conditions mentioned in the contract, then it will lead to the violation of the contract and the contractor will be liable for the penalty and face the consequences.

In the given case, he didnt complete the work of limestone laying initially before paving the pavers. He breached the terms of contract. Resulting which home owners can claim the damage caused to property along with the contract cost. The argument made by the contractor regarding the economic value of the house does not stand valid because he is confined only to the terms of the contract. He has nothing to do with the other conditions out of the contract.

So, the compensation claimed by house owners for contract value in addition to the cost of bringing the property as it was, stands totally justified. Also, since the contractor didnt complete his work as per contions of the contract, he is not liable for any extra money for any extra work done.

2) Maintenance of quality rooms was the major clause of the franchiese contract. Constant breach of the same condition will lead to neceessary action by the Mega hotel inc.

In the given case, the franchiese owner was constantly failing for maintaining of quality rooms as the per franchiese contract. Also the reason given by the Franchiese owner for such failure was not justified and it would have been avoided.

Costruction of bridge has nothing to do with the miantenance of hotel and internal control of the hotel managemnet. The bridge construction does not make any mainetenace issues which is unavoidable. ALso reporting of employeess on time the responsibility of the hotel management. It cannot take plea of any other conditions.

So cancellation of franchiese contract by Mega hotel Inc is totally justified.


Related Solutions

Mark has a Homeowners 3 (special form) policy that provides $120,000 of insurance on his dwelling...
Mark has a Homeowners 3 (special form) policy that provides $120,000 of insurance on his dwelling and $100,000 on personal property. The replacement cost of the home is $200,000. Assume the coinsurance requirement is 80% and ignore any deductible. Treat each case separately 4. How much will Mark collect if his sofa, with a replacement value of $2,500 but an actual cash value of $1,800, is destroyed in a fire.
Mark has a Homeowners 3 (special form) policy that provides $120,000 of insurance on his dwelling...
Mark has a Homeowners 3 (special form) policy that provides $120,000 of insurance on his dwelling and $100,000 on personal property. The replacement cost of the home is $200,000. Assume the coinsurance requirement is 80% and ignore any deductible. Treat each case separately. 1. If the dwelling is damaged by a covered peril, would the insurer pay replacement cost for the damage? (circle one) Yes No Explain why or why not:
Mark has a Homeowners 3 (special form) policy that provides $120,000 of insurance on his dwelling...
Mark has a Homeowners 3 (special form) policy that provides $120,000 of insurance on his dwelling and $100,000 on personal property. The replacement cost of the home is $200,000. Assume the coinsurance requirement is 80% and ignore any deductible. Treat each case separately 7. Mark’s house is by Mississippi river and his house is badly damaged by flood. As a result of the flood, the front lawn has a 3-foot crack and is now uneven. (1 point) Would it be...
Mark has a Homeowners 3 (special form) policy that provides $120,000 of insurance on his dwelling...
Mark has a Homeowners 3 (special form) policy that provides $120,000 of insurance on his dwelling and $100,000 on personal property. The replacement cost of the home is $200,000. Assume the coinsurance requirement is 80% and ignore any deductible. Treat each case separately 6. Mark accidentally spills a can of paint while painting the living room. A wall-to-wall wood floor of the room (which is considered part of the dwelling) is badly damaged and must be replaced. Would the wood...
If all health information is confidential, explain why it may still be necessary to mark some...
If all health information is confidential, explain why it may still be necessary to mark some health records as "sensitive" or "restricted."
Mark those accounts that would still have a balance after the closing entries . Commission Revenue...
Mark those accounts that would still have a balance after the closing entries . Commission Revenue , Cash , Retained Earnings , Dividend Salaries Payable ,Insurance Expense ,Accumulated Depreciation,saleries payable My answer: cash, Accumulated depreciation Is it correct?
Despite all your efforts Mark is still concerned that he has very little money in the...
Despite all your efforts Mark is still concerned that he has very little money in the bank according to his bank statement. He has been speaking to his cousin Randy who has shown him some of the records of Deafening Racket which show the studio has a very healthy cash position at the end of September despite writing out a cheque of $15,000 to make sure Mark was liquid enough to pay some upcoming bills. September Bank Statement Date Particulars...
1. ________ are items owed to a creditor. ________ are items owned by a company. ________...
1. ________ are items owed to a creditor. ________ are items owned by a company. ________ represents owners' claims to company resources. Expenses; Revenues; Net income Expenses; Revenues; Stockholders��� equity Liabilities; Assets; Stockholders' equity Liabilities; Assets; Net income 2. Under ________ accounting, revenues are recorded when earned and expenses are recorded with related revenues. Under ________ accounting, revenues are recorded when cash is received and expenses are recorded when cash is paid out. Financial statements are prepared using ________ accounting....
Problem 1 On January 1, 2011, Pamela Corporation and Sheila Company have entered into a business...
Problem 1 On January 1, 2011, Pamela Corporation and Sheila Company have entered into a business combination agreement under which Pamela will issue 8,000 shares of its P10 par value ordinary share capital to acquire all the identifiable net assets of Sheila Company. Just prior to the business combination, the individual statements of financial position of Pamela and Sheila showing the carrying value and their fair value are as follows: Pamela Corporation Sheila Corporation Statement of Financial Position Item Book...
T or F: 1. Homeowners insurance protects homeowners against losses from theft, damage to buildings, and...
T or F: 1. Homeowners insurance protects homeowners against losses from theft, damage to buildings, and liability for accidents occurring on your property. 2. Monthly housing expenses like rent or mortgage should not be in excess of 25% of take home pay. 3. In the U.S. federal estate tax applies to all estates over $3,000,000. 4. HIPAA protects people's ability to obtain continued health insurance after they leave a job or retire. 5. Whole life insurance provides the insured with...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT