planned in 1972 as a low-income housing complex.  A mortgage on the apartment property was to be held by Atico Mortgage Co., and guaranteed under the Federal Housing Administration, hereafter called F.H.A., 236 program.  The owner of the complex was to be the Dean Mohr Plaza Apartments, Inc.  The original general contractor was Southeast Construction and Development Company and James Austin, a joint venture.  Parliament, the plaintiff-appellant, issued performance and payment bonds running to the owner and insuring performance and payment by the general contractor.


3
The original construction contract was executed on December 20, 1972 in the amount of $1,332,000.  In early 1973, the general contractor became financially distressed and announced that it was unable to complete the construction under its contract.  Atthe time of the announced default, it was estimated that the project was fifteen to twenty-two percent complete.  There were several unsuccessful attempts to restart the project in 1973.


4
Parliament first became directly involved in attempts to restart the project in 1974.  Early in that year a representative of Parliament met with the owner and the F.H.A.  Parliament decided to take responsibility for completing the project.  It sought a general contractor to complete the work.  Parliament's agent talked to various persons about undertaking the completion of the project.  In that connection, Parliament's agent talked with the appellant, Adrian Hanson, who had been an underground site utility subcontractor on the original project.  Hanson indicated that he was not interested, but that he knew