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Madison Rock
Services, Inc. agreed to work as a subcontractor on a sewer project, which
Strandemo Paving, Inc. was the general contractor. For drilling and blasting a
certain amount of rock, Madison Rock Services was to be paid $29 per cubic yard
or a time-and-materials basis, whichever is less. From the beginning, Madison
experienced problems. The primary obstacle was a heaving concentration of
water, which according to the custom of the industry, Madison should have
controlled but did not. Madison was compelled to use more costly and
time-consuming methods than anticipated, and it was unable to complete the work
on time. Madison asked Strandemo to pay for the rest of the project on a
time-and-materials basis. Madison signed a modification of the original agreement.
On completion of the work, Strandemo refused to pay Madison the balance due
under the modification. Madison filed suit in a court against Strandemo.