BetterLawNotes-5 (2)

CONTRACT LAW

Alf operates a garage and workshop where he restores and sells classic cars. One night a group of youths from a nearby housing estate break in and set fire to the premises. The building and all the vehicles and equipment in it are completely destroyed. Alf has yet to decide whether to try to re-build his premises and business.

Before the fire, Bob, a builder, had been in the process of repairing the roof of Alf’s premises. Alf and Bob had agreed that Bob’s £20,000 fee for the work would be payable in full on completion of the work. By the time of the fire, Bob had completed roughly half of the work and had incurred staff costs of £3,000 and expenditure on materials of £4,000.

Also in the period leading up to the fire, Alf had been restoring a car for Chris. Chris had recently bought the car at auction for £2,000. In return for Alf’s work, Chris had agreed to pay Alf £10,000 at the outset with the balance of £20,000 being due on completion. By the time of the fire, Alf had spent a total of £3,000 on parts for the vehicle and incurred staff costs of £5,000. On the morning after the fire, but before discovering what had happened, Alf agreed online to buy a re-conditioned engine for Chris’s car from another dealer for a price of £8,000.

The day before the fire, Alf had agreed to buy a car from Dan for £10,000 to be paid in full on collection of the car from Dan’s premises in two weeks’ time.

Discuss what rights and liabilities Alf has with respect to Bob, Chris and Dan.

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