Engineer E and Owner O are engaged in contract negotiations forE to design and build a building for O. The proposed contract isfor $200,000. The estimated duration of the turnkey project is 15months. After reaching an oral agreement of the above, O tells Ethat they should get together over the next few weeks to hammer outthe contract language details for a formal written contract. Ebegins work without notifying O and completes approximately 30% ofthe design work (at a cost of $3000) when negotiations break offover "technicalities." When E indicates work has already begun, Oorally tells E to stop work as they cannot reach an agreement. E'sbudget estimated a $12,000 profit for E for the project. Assume forthis question that the design/build turnkey project is NOTseverable.
1. E sues O for the entire $200,000. Who wins, what, andwhy?
2. ADDITIONAL FACTS: O mails a check for $3,000 to E with aletter stating that the check is "to cover your costs for the workperformed under our canceled agreement for the $150,000 project." Esues O for the remaining $197,000. O countersues asking for thereturn of the $3,000. Who wins, what, and why?
