A homeowner entered into a written contract with a...

A homeowner entered into a written contract with a local construction firm to build a 12’ by 12’ addition onto the homeowner’s house for $25,000, payable on completion. Under the terms of the contract, the homeowner’s duty to pay the entire contract price was conditioned upon the construction firm’s completing the job by March 30. Shortly after the homeowner and the construction firm drew up their contract, the city in which the homeowner’s house is located revised several zoning regulations. One of the revised regulations prohibited property owners in residential areas from building structures on their property less than three feet from their property line. To bring the project into compliance, the construction firm instead built a room measuring 11’ by 12’. The decrease in the size of the addition reduced the value to the homeowner by $1,000. The cost of paying another contractor to extend the room, assuming such extension were legal, would be $5,000. If the construction firm completes the project on time and conforms with all other contract specifications, to what amount is the construction firm entitled in payment？

A、(A) $25,000, less the construction firm’s cost and profit allocable to the “missing” foot.

B、(B) $25,000, because the constructive condition of complete performance by the construction firm was excused.

C、(C) $25,000, less $5,000, because the construction firm substantially performed.

D、(D) $25,000, less $1,000, because the construction firm substantially performed.