This section contains the nature of the case and procedural background.

Universal (P) entered into a written contract with Moon (D) for the construction of a motel. The contract was specific about certain specifications. A masonry sub failed to use the proper specified proportion of a reinforcing substance in building the walls. When this defect was discovered, D went ballistic and threatened to expel P from the job. P then entered into a supplemental agreement that stated that P was to pay D $5000 as damages for the absence of the reinforcing materials, that P will perform additional work as no cost to D, that the finish date was extended from April 1 to July 1, and liquidated damages at a specific rate per day to be assessed for any further delays. P finished on September 1 and left the site October 1. After filing this suit, P went bankrupt. Disputes developed over additional work done without a written change order as demanded under the contract. P claimed that D orally authorized the additional work, saw it performed and promised to pay despite the fact that the revisions were not in writing. The trustee won a final decree in the lower court for $127,759.54. D appealed.

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