Q1) A roofer agrees to put a new roof on a shop by 1 December for a price of 5000 AED. The shop owner explains that in December last year the shop made a profit of 500 AED per day. The roofer assures the shop owner that the job can be done on time. As the parties agree that the shop owner is likely to lose 500 AED a day for everyday on which the shop cannot be opened, a liquidated damages clause in the contract states that in the event of the roofer not performing the contract on time will pay 500 AED damages for everyday that he is late. The job turns out to be more difficult than the roofer had imagined. The roofer does his best but cannot finish the job until 6 December. The shopkeeper admits that trade in the area has been well down on last year as a new supermarket has opened nearby. The profits made by neighboring small shops indicate that this year the shop would only have made 300 AED profit per day. Which one of the following statements is likely to reflect the true legal position? The contract is frustrated and the roofer is absolved from all liability. As the shop has received a valuable benefit worth 5000 AED, it will have to pay for this. The roofer will be entitled to the contract price but will have to pay 500 AED damages per day (as the liquidated damages clause states). The roofer will not be entitled to any payment. He did not perform his contractual obligations in accordance with the terms of the contract. None of the options given is correct. The roofer will be entitled to the contract price, but will have to compensate the shop owner by paying him only 300 AED per day damages.