Martin is a builder. He contracts with Jim, a bricklayer, to work on one of his construction sites in Northfields. He agrees to pay Jim £30 per hour which is above the average price because Jim is known for his fast yet excellent quality bricklaying.
Three days after starting work, Jim is approached by Lee who offers Jim £50 per hour to work for him. Jim informs Martin of this offer and says that if Martin does not match the price, he will quit.
Martin is very concerned because he is currently two weeks behind schedule on this project and faces a penalty if he fails to meet the deadline. He agrees to pay Jim the increase, provided the work is completed on time.
Martin now regrets agreeing to this increase in payment.
Martin always buys his timber from Lee. The recession has created financial difficulties for Martin, who owes Lee £2,000 to be repaid in March. As Martin has been a loyal customer over the years, Lee says to Martin, “..Let me have £1,500 now and that’ll be the end of it..” Martin pays the £1,500 in January.
As the recession in the building industry has increased, Lee now wants to claim the further £500.
Advise Martin whether he must pay Jim the extra £20 per hour and whether Lee would succeed in recovering the £500 from Martin.