Explain the Law of contract under the scenario below
GateKeepers, Inc. (GKI) was awarded a contract for delivery of electronic gating systems. The contract has a base year and three option years. The base year is for three systems in three locations in the US and is priced at $4,000,000. The option years require delivery of three systems each year and the values are $3,800,000, $3,650,000, and $3,500,000 respectively.
The contract calls for standard FAR inspections and acceptance clauses(FAR 52.246-1 and FAR 52.246-2). During the development phase in Months 1-8, the USG inspected GKI’s factory 4 times, including for standard program reviews, such as preliminary design review and critical design review meetings. The USG examined procurement records,the factory, warehousing, shipping and distribution details and several other critical areas where the system development and manufacturing life cycles would play out.
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