Q: How much is a company owed when they were unable to complete the duties of a $10,000 contract?
Suppose you own a graphics design company, BIG Designs, that designs and installs advertisements and billboards. Back in January 2020, you were very excited to sign a $10,000 contract with the city to publicize a series of concerts in the parks. The ads and billboards would be installed in March to advertise the start of the concert series in April so BIG Designs started working on designs right away. By March, your designs were finished. However, when you contacted the city for final approval of the designs, the city informed you that the concert series was canceled because the state government ordered that gatherings in public must be limited to 10 people or less. Assume BIG Designs has not yet been paid and that no signs or billboards have been fabricated yet. Does the city still owe BIG Designs a payment for advertisements that cannot be used? If so, how much is owed?
A: Did the contract have a clause excusing performance (payment) by the city if certain events occurred such as Acts of God? See counsel for an analysis of the terms of the contract which may excuse the city or which my require them to pay regardless of a particular event.
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