BUS LAW De Anza College Application of Contractual Rights in Business Discussion

Donald Rump was a developer and general contractor. He agreed to build a small red building for Vladimir Utin for a price of $2,000,000. The contract explicitly called for Rump to use 8X8 foundational support beams on the bottom floor of the building. The beams exceeded the local building code, but Utin was clear that he wanted the 8X8 beams used in construction.

The contract called for four payments of $450,000 each at specific times in the project, with a final $200,000 payment after the building was completed.

Rump completed the building on time; Utin made the first four payments as scheduled. Utin discovered that Rump had not used the 8X8 beams the contract called for, and had used combined 4X4 beams instead, assuming they would not be discovered because the beams were covered with sheet rock. Utin now has indicated he will not make the final payment. Rump instituted this suit for the payment. An independent engineer indicated that the net reduction in the value of the building using the lesser quality material was $80,000. Rump has sued for $120,000.

Advance arguments for both sides and indicate who should prevail and why.

Use the following approach in answering the question – do your own work

Issue – what is the key issue(s)

Decision – who should prevail

Support – explain the legal reasons for the prevailing party

Dissent – what are the strongest arguments for the losing party