Preexisting Duty Melissa Faraj owns a lot and wants to build

Pre-existing Duty: Melissa Faraj owns a lot and wants to build a house according to a particular set of plans and specifications. She solicits bids from building contractors and receives three bids: one from Carlton for $160,000, one from Feldberg for $158,000, and one from Siegel for $153,000. She accepts Siegel\'s bid. One month, after beginning construction of the house, Siegel contacts Faraj and tells her that because of inflation and a recent price hike for materials, he will not finish the house unless Faraj agrees to pay an extra $13,000. Faraj reluctantly agrees to pay the additional sum.

(a) Discuss whether or not construction companies can raise the price of completing construction contracts based on inflation and rising material costs and if Faraj is required to pay the additional $13,000 once the work is completed.

Solution

Construction companies can not rise the price of completing construction based on inflation and rising material cost .

A promise that Siegels made when he accept the bid of $153k imposes by law and he needs to accept it.

A police officer has the duty to investigate crime and arrest criminals, he can not collect reward for providing information leading to the caputre of a criminal.

Siegel needed to consider those factors when he put his bid (the estimate of direct job cost, which includes direct labor costs, material costs, equipment costs, and direct filed supervision)

Faraj does not need to pay him more money, she could take him to court for doing this.