Contract Law and Consumer Rights

Reynholm is a small IT company that specialises in creating customised data management software. The business owner of Reynholm, Maurice, places an advert in the Kent Messenger promoting the company’s services. The advert is seen by a large technology company called Augury, who provide software programmes specifically to major facilities management companies. The Chief Technology Officer of Augury, Larry, contacts Maurice by telephone to ask if Reynholm could assist them with developing a programme to help their clients comply with new data security regulations being introduced into the facilities management industry.Maurice and Larry meet to discuss Augury’s requirements. During the negotiations, Larry tells Maurice that the newly developed programme has to be ready by 4th December, 2020. This is because Augury has secured a very lucrative contract to roll out the new software to a major facilities management client of theirs, called Navigator, from 7th December 2020. Maurice confidently states that this will not be an issue, and says he can do the full development by that date for a fee of £80,000 if that would be acceptable to Augury. As he is authorised to confirm the deal Larry agrees, and the two parties shake hands.In early-November, as Larry monitors Maurice’s progress, he becomes increasingly worried that Maurice is not going to meet the December deadline. When he calls Maurice to discuss this, Maurice admits that he is indeed behind schedule, and has realised that to finish the work on time he will have to charge Augury more so that he can bring on board a specialist freelancer to help him with the programming. Without that additional money, Maurice says it will not be commercially viable for him to complete the project.Having assessed the situation it is clear to Larry that Augury will not be able to start the rollout of their programme to their client Navigator on time if Maurice is behind schedule. Furthermore, having spoken to Navigator again, they have pointed to a term in their contract with Augury that applies a penalty fee for every week the roll out is delayed. As such, Larry promises to pay Maurice an additional £8,000 for Reynholm to complete the data management software on time.Having used the money to take on the specialist freelancer, Maurice completed the work to the deadline, and put in his invoice for £88,000. However, Augury is refusing to pay Maurice more than the £80,000 they say was agreed in the original contract, as they assert that there was no legally formed contract to pay Maurice the additional £8,000.Advise Maurice on the following issues (you must refer to relevant case law and, where appropriate, additional sources to support your argument);a) how the original contract for £80,000 was legally formed;b) whether Maurice has a legally binding contract that entitles him to the additional£8,000 from Augury;c) the various methods Maurice could consider to settle this dispute (you shouldconsider both litigation and alternative dispute resolution);d) whichmethodofresolutionyouwouldrecommendtoMaurice,andwhy.

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