Defyn is the owner of a business that produces ready meals for a number of high-street shops. Defyn has recently been approached by an international supermarket chain, Global Foods Ltd (GF). GF want to purchase Defyns ready meals for the next 5 years. This contract is worth 100,000 a year. Over the next 5 years this will be worth 500,000. Defyn is keen to enter in to this contract and reads through GFs terms and conditions. He is a bit concerned about clause 10 in the contract which states: The supplier [Defyn] of the ready meals will deliver an order of 250 ready meals to each of our ten supermarkets in the UK. All deliveries must be made no later than 5pm on the 25th day of each month starting from the 25th January 2020. Failure to deliver these orders within the stipulated time, to each of our supermarkets in the UK, will require the supplier [Defyn] to pay a late delivery fee of 500 per day whether delivery to one store or all ten stores is delayed. Defyn is keen to take on this new business as he feels it is a once in a lifetime opportunity and signs the contract. However, Defyn will need to expand his existing premises and install additional machinery to produce the ready meals for the GF contract. He purchases a building next to his existing business. These new premises are perfect for the expansion of Defyns business. However, Defyn needs to install a new floor in this building to take the weight of the new machinery that needs to be installed to manufacture the ready meals for GF. On the 10 November 2019 Defyn contacts High Quality Floors Ltd (HQF). Defyn explains that he needs a reinforced floor installed at his premises in order to expand his business. Defyn informs HQF that the floor must be completed no later than the 20 Dec 2019 as he needs to install new machinery. HQF assure Defyn they will install the floor no later than the 20 Dec 2019 and they agree a contract price of 10,000. On the 11 November 2019 Defyn contacts Express Meals Machinery (EMM) and explains he needs 2 ready made meal machines installed and in working order no later than 15 January 2020. EMM explain to Defyn they need five days to install the machinery and their fee is 25,000. Defyn agrees the fee. He then explains he is having the floor reinforced and this should be finished no later than the 20 December 2019. Defyn informs EMM they can have access to the premises and begin installing the machinery from 5 January 2020. HQF contact Defyn on the 19 December 2019 and inform him they are waiting for materials to be delivered. These materials will not be delivered until the 20 January 2020 and the floor will not be completed until the 22 January 2020. Due to the late completion of the floor EMM are not given access to the premises until the 23 January 2020. EMM complete the installation of the machinery by 28 January 2020. Defyn makes the delivery of 250 ready meals to each of the 10 supermarkets in the UK by 8 p.m. on 30 January 2020. GF are now claiming 2500 from Defyn for the late deliveries in accordance with clause 10 of their contract.Advise Defyn.100 marks
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