Story Case

Mr. J. H. Alverson prepared the specifications for building a barn, and submitted them to George McDonald, a carpenter. After looking them over, the latter agreed to build the barn for the sum of $350. He at once set to work and soon finished the building. "When Mr. Alverson inspected the barn, he found that there were defects in the building. It was found that the doors all opened inward, when the specifications directed that they should open outward. However, it appeared that this defect could easily be remedied for a very small sum. After the first rain, it was seen that there were two leaks in the roof. These could also be remedied at slight cost. Because of these minor defects, Mr.Alverson refused to pay McDonald anything for his work. He claimed that strict compliance with all the specifications was a condition precedent to McDonald's right to recover. The latter brought suit, and claimed that he was entitled to the contract price, less any damage which the defects caused. What should be the decision of the Court?

Ruling Court Case. Woodward Vs. Fuller, Volume 80 New York Reports, Page 312

Woodward, who was a carpenter, contracted with Mrs. Fuller to alter and repair a house, which she owned and occupied. He finished the work, but several minor defects appeared therein. It was shown that the roof and chimneys were not well supported; that certain folding doors were not well hung; and that one door did not fit its casings, so that the door would not close easily. With the exception of these defects, the work was performed in a workmanlike manner and fully in accord with the terms of their contract. These were not substantial defects and could easily be remedied at small expense and little inconvenience to Mrs. Fuller. Notwithstanding this, because of these defects, Mrs. Fuller refused to pay Woodward for any of his work. He, thereupon, brought suit upon the contract for the compensation agreed upon, less the amount of damages caused by these defects.

Mrs. Fuller contended that strict performance was a condition to his right to recover upon the contract; and that his substantial performance was, therefore, immaterial so far as his right to recover upon the contract was concerned.

Decision

A contract, of course, is discharged when it can be shown that it has been performed strictly in accordance with the terms of the contract. Such performance entitles the one performing to the compensation agreed upon in the contract. Furthermore, if he has substantially performed his part of the contract, he is entitled to recover upon the contract the compensation agreed upon, less the damages caused by the insubstantial defects of his performance. In this case Woodward did substantially perform the contract, and is entitled to recover the amount of compensation, less the damages caused by the defects.

By the Court: "As to the principal contract, the plaintiff (Woodward) did not fully perform it. As the defendant (Mrs. Fuller) was not bound to pay the contract price, so far as it was to be paid in money, until the contract was fully performed by the plaintiff, full performance by him was a condition precedent to his right to have payment, unless she has accepted the work, or waived such a performance.

There is no finding that she waived such a performance, or that she accepted the work as complying with the contract. If the plaintiff is to be held strictly to the terms of his contract, he must fail to recover thereon, and that he should be, is the effect of the earlier cases in this state. But there has been a relaxation of that rule, and now, on such a contract, there may be a recovery without a literal or exact performance of it. It is now the rule that, where a builder has in good faith intended to comply with the contract, and has substantially complied with it, although there may be slight defects caused by inadvertence or unintentional omissions, he may recover the contract price, less the damages on account of such defects. The defects must not run through the whole, nor be so essential as that the object of the parties to have a specified amount of work done in a particular way is not accomplished".

Judgment was given for Woodward, less the damages, amounting to $100.

Ruling Law. Story Case Answer

As a general rule the obligation of a contract must be fully performed before any right to recover on the contract arises in favor of the person upon whom this obligation rests. It is said that a compliance with all conditions of the contract is a condition precedent to the right to recover on the contract. This, in general, seems just. For a person is entitled to have just what he contracts for. Yet, on the other hand, if the obligation has been substantially performed, it is not just that he should be permitted to repudiate the contract because of some slight defect which may easily be remedied. This applies especially to building contracts. When one person builds on the land of another, immediately the materials placed upon the land become the property of the owner of the land. If he were permitted to repudiate the contract because of such slight defects, it would be unjust to the other person. Therefore, it is generally held in reference to building contract that substantial performance will entitle the performer to his right to recover the contract price, less the amount of damages the defects have caused. However: The defects must be slight; they must not run through the whole contract; they must be easily remedied. In the Story Case, the performance by McDonald was substantial. Consequently he should be entitled to recover on the contract for the compensation agreed upon, less any damages caused by the defects in construction.