In order to increase the profile for The Auditorium, S4H decided to find a marketing company which would be able to organize various promotional activities.

Please answer all sections (a) to (d).
Sound-4-Hull Ltd (S4H) own and operate a music venue in Hull called the Auditorium. Over the past few years, it has hosted an average of 85 events, both classical music and rock & pop concerts. When built, the Auditoriums capacity was approximately 3,000 people, which meant that it was one of the smaller music venues in the UK. In order to attract more and bigger artists, S4H decided to extend the Auditorium significantly to increase its capacity to 8,000, which would make the Auditorium much more attractive for tours by many national and international music acts. As well as enlarging the main arena, new dressing rooms, better catering facilities, and several new toilet areas were provided. The work started in July 2015 and was due to be completed by December 2015, with a big opening event scheduled for 4 January 2016.
(a)As part of the extension, new seating was to be installed in the main arena. Following a tendering process, S4H concluded a contract with Newland Seating (Newland) for the installation of 8,000 seats. Newland had offered by far the best price (2million to cover both the cost of the seats and the labour involved in installing the seats). The contract specified that installation had to commence on 15 October 2015, and had to be completed no later than 18 November 2015.
Newland manufactured the required number of seats and commenced the installation on the contract date. However, Newland had significantly under-priced the contract – the cost of manufacturing the seats was 1.9million alone, and the installation would cost another 600,000. Newland therefore stopped work on 1 November and contacted S4H to say that they would not be able to continue with the installation unless S4H agreed to pay a further 800,000.
S4H was very unhappy about this and made enquiries with several other companies to check if they could step-in, but with no other company available and no room for slippage in the timetable for getting the Auditorium ready, it was left with no choice but to make the additional payment. Having received the money, Newland completed the installation by the agreed date.
On 15 December, S4H wrote to Newland to demand that Newland repay the additional money, emphasising that Newland was only awarded the contract because of the low price it charged. Newland replied stating that it was entitled to the additional payment as this ensured that the seating was installed on time and that S4Hs plans for reopening The Auditorium remained on schedule.
Advise S4H whether Newland is entitled to keep the extra 800,000, or whether there are grounds for it to recover the money.
(b)In order to increase the profile for The Auditorium, S4H decided to find a marketing company which would be able to organize various promotional activities. It therefore placed an advert in Gigs and Sounds, the trade magazine for music venues and promoters, inviting marketing companies to submit their proposals for a marketing strategy together with full costings. Promomusic saw the advert and put together a proposal as requested and posted this to S4H. Musiclive also saw the advert and emailed its proposal to S4H. Having considered both proposals, S4H decided to go with Musiclive, and, on 15 September 2015, posted a letter to them which said we have considered your proposal and wish to proceed. Please contact us to make the necessary arrangements. S4H also sent a letter to Promomusic to inform them that they had been unsuccessful, which arrived on 16 September.
Due to a printing error, the postcode on the letter to Musiclive was incomplete and the letter took two days to arrive (17 September). Shortly after posting the letter on 15 September, S4H discovered that Musiclive also had a marketing contract with the Beverley Bowl, a nearby music venue which often competes with S4H for concerts, and S4H immediately emailed Musiclive to say that it no longer wished to proceed. On the same day, S4H emailed Promomusic saying that we would be delighted to give you the marketing contract. As a result of a computer problem, its contract manager did not see the email until after the letter had arrived, at which point Musiclive had already allocated a team to work on S4Hs contract. In the meantime, Promomusic had emailed S4H saying we are delighted you have chosen us. Please return the attached contract documentation with an authorised signature so we can proceed.
On 19 September, S4H discovered that Musiclives contract with Beverley Bowl was coming to an end on 22 September and that it could have gone with Musiclive after all. Both Musiclive and Promomusic think they have a binding contract.
Advise S4H whether any contracts are in place between it and one of the marketing companies.
(c)On 1 August 2015, S4H entered into a contract with Suttonpipes on the latters standard terms for the installation of the new toilet facilities and associated plumbing works. Suttonpipes duly carried out the agreed work and completed this by 12 October 2015. During a concert on 2 February 2016, which was attended by approximately 3,500 audience members, all the toilets on the ground floor blocked and subsequently overflowed, causing the floor of the arena to flood with sewage. The concert had to be stopped partway through, and audience members were given a refund. An investigation reveals that the pipes had cracked in several places, and that Suttonpipes had used the wrong type of waste pipe to save money.
S4H has asked another plumbing firm to replace the pipes, and has written to Suttonpipes to demand that it pays for the costs of replacing the pipes as well as the cost of the tickets it had to refund. Suttonpipes has refused to pay anything and has pointed to the following clause in their standard terms:
All work is undertaken to the best of our abilities. Because we offer you the best price, we accept no liability for any problems which arise more than one month after completion of all work. In any event, we are not liable for any losses beyond the immediate making good of any problems.
Advise S4H whether (i) they are entitled to recover the cost of engaging another plumber to replace the pipes; (ii) they can recover the cost of refunding guests whose concert was cut short; and (iii) assuming that S4H could recover for both (i) and (ii), whether the clause is effective in restricting the liability of Suttonpipes.

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