Question

Under a contract with Bucolic Farms, Agro Excavation, Inc., begins digging an agricultural pond. In mid-project, Agro asks for $15,000 over the contract price, claiming an increase in the "cost of doing business." Bucolic agrees but later refuses to pay. Their agreement is

Answer 1

The student's question deals with a business law scenario involving a contract modification where Agro Excavation, Inc. requests additional payment from Bucolic Farms during a project. This reflects competitive market dynamics similar to those in agriculture, where charging above the going rate is not easily feasible. The legitimacy of Bucolic's refusal to pay the extra amount depends on contract law principles and documentation.

Step-by-step explanation:

The scenario described involves an agreement between Bucolic Farms and Agro Excavation, Inc. where Agro, in the course of digging an agricultural pond, requests an additional $15,000 above the contract price, justifying it as an increase in the cost of doing business. Bucolic Farms initially agrees to this increase but later refuses to pay the additional amount. This situation presents a case in business law that deals with contract modifications.

In business terms, when all parties are charging the going rate, it creates a competitive market similar to that which agricultural growers experience. Businesses cannot easily increase prices without potentially losing customers to competitors. Agro's request for additional funds mid-project could be seen as attempting to charge more than the going rate, which can be problematic if not contractually provided for.

If the agreement for the additional $15,000 was not documented in a way that is binding under applicable contract law, Bucolic may have grounds to refuse the payment. This may depend on various factors, including the original contract terms, the nature of the agreement for the additional charge, and the jurisdiction's laws governing contract modifications.

Answer 2

unenforceable because Agro's performance was preexisting duty.

Step-by-step explanation:

In the situation being described, it can be said that their agreement is unenforceable because Agro's performance was preexisting duty. This refers to the party's offer of a performance that was already required of them under the existing contract making a modification null. In this scenario, this is exactly what is happening, Agro Excavations has already signed a contract to dig the pond and has no enforceable reason to add $15,000 to the contract price mid-project and must finish digging the pond for the agreed-upon price of the first contract.