IRAC Case Analysis Method

Art and Betty are neighbors and live in an agricultural area. Art just recently had built a new red barn. In late January 2004, Betty asked Art on what terms he would build a barn on her property. Art said that because he had never built a barn for hire, he would charge Betty only $100 per square foot, about $10 more than his expected cost. Art said that he would build a barn 50' by 50'. Betty said, "OK, if you guarantee January 1, 2005 completion." Art agreed and asked for $10,500 in advance to purchase supplies, with any additional further payment made on completion. Betty said, "OK," and paid Art $10,500.

On March 10, 2004, Art started to purchase the lumber and found out that the price had increased 150% from the date of his original bid to Betty. On March 12, 2004, he notified Betty that he could not afford to build the barn for the agreed price. He said he would have to charge $30.00 more per square foot because of the increase in lumber prices. Betty orally agreed to the price increase.

On May 1, 2004, Art notified Betty that he would not build the barn because he had just contracted to sell his farm to Ted and would be moving out of the area. Betty then contacted her uncle John, explained her circumstances with Art and asked John if he would build the barn on the same terms as she agreed with Art. John said that since Betty was his favorite niece, he would build the barn for her at no charge. Betty thanked John for his generosity and accepted. Betty was able to stop looking for someone to build the barn. John died before he started work on the barn.

Betty, annoyed by Art's failure, sued Art seeking to recover her $10,500, plus damages. Further, Betty is seeking damages from John's estate for John's failure to build the barn.

In her suit against Art, what are Betty's rights and what damages, if any, and will she recover? Discuss.
In her suit against John's estate, what are Betty's rights and what damages, if any, and will she recover? Discuss.