Contract Essay Case1An information technology firm submitted a bid to design software and hardware for an electronic technology process to control the operation of a large scale baggage handling and related security facility for a major airline. The firms guaranteed maximum price was the lowest bid and the contract was awarded to it. The contract conditions entitled the information technology firm to terminate the contract if the airline did not pay monthly progress payments within 15 days following certification that a process payment was due. Pursuant to the contract an independent engineering firm engaged as contract administrator carried out the certification. The work under contract was to be performed over an 8 month period. After commencing work on the project the information technology firm determined that it had made significant judgment errors in arriving at its bid price and that it would face a major loss on the project. Its concern about the anticipated loss was increased further when it was also learned that, in comparison with other bidders, its bid price was extremely low and that, in winning the bid, by comparison with the other bidders, it had left more than two million dollars on the table. Three monthly progress payments were certified as due by the independent engineering firm and paid by the airline in accordance with the terms of the contract. However, after the fourth monthly progress payment was certified as due by the independent engineering firm, the airlines finance department asked the information technology firms representative on the project for additional information relating to an invoice from a subcontractor to the information technology firm. The subcontractors invoice comprised a portion of the fourth progress payment amount. The airlines finance department requested that the additional information be provided prior to payment of the fourth progress payment. There was nothing in the signed contract between the information technology firm and the airline that obligated the information technology firm to provide the additional information on the invoice from its subcontractor. However, the information technology firms representative did verbally indicate to the airlines finance department that the additional information would be provided. The information technology firm never provided the additional information relating to the subcontractors invoice Sixteen days after the fourth progress payment had been certified for payment, the information technology firm notified the airline in writing that it was terminating the contract because the airline was in default of its obligations to make payments within fifteen days pursuant to the express wording of the contract. Was the information technology firm entitled to terminate the contract in these circumstances? In giving reasons for your answer, identify and explain the relevant legal principles, their purposes, how these precedents have arisen, and how they apply to the facts. Be sure to reference relevant statutes and precedents.Case2An owner and a Contractor entered into a written construction contract which provided that payments were to be made by the Owner to the Contractor within five days subsequent to an Engineers Certificate being issued and that, if the Owner should fail to pay the Contractor within such five day period any sums certified as due by the Engineer, the Contractor would be entitled to terminate the construction contract. The Contractor had been the lowest bidder on the project and, as the construction proceeded, became concerned that, because of its low bid, it would lose money on the contract. During the first two months of the six-month construction schedule, the Engineer certified payments due by the Owner to the Contractor and such payments were made to the Contractor within five days of such certification. At the end of the third month of construction, the Engineer certified a further sum as due to the Contractor. In spite of having received the Engineers Certificate, the Owner requested that prior to payment the Contractor obtain the corporate seal of one of its subcontractors on a document supporting the Engineers Certificate and the Contractor stated that it would obtain such corporate seal. However, the Contractor never did obtain the corporate seal; the five day payment period passed and ten days later the Contractor notified the Owner that it was terminating the contract on account of the Owners failure to pay it within the five day period pursuant to the terms of the construction contract. Was the Contractor entitled to terminate the contract in the circumstances? Explain. In giving reasons for your answer, identify and explain the relevant legal principles, their purposes, how these precedents have arisen, and how they apply to the facts. Be sure to reference relevant statutes and precedents.