McDougal Construction and Espinosa Entered a Contract to Build the Latter

question 28

Essay

McDougal Construction and Espinosa entered a contract to build the latter a two-story house.However,after the company began its construction,Espinosa decided that she wanted a terrace garden,making the house a three-story.McDougal indicated the additional costs to Espinosa and completed the job including the terrace garden - neither of which was in writing or included in the original contract.Espinosa paid McDougal the original amount,but did not pay the extra amount for the third story.Discuss if the court will admit an oral testimony of the McDougal's to the original contract.

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Definitions:

Equity Method

An accounting technique used to record investments in associate companies where the investor has significant influence but not full control.

Excess Consideration

The amount paid over and above the fair value of net assets acquired in a business acquisition.

Goodwill

An intangible asset that arises when a business is acquired for more than the sum of its identifiable net assets.

Equity Income

Income earned by an investor from an investment in the stock of a company, typically through dividends and the investment's appreciation in value.