Essential Supplements for Success in 1L Contracts:
1L Law School Contracts outline based on the following books:
Kent (Homeowner) wanted JY (Contractor) to use only READING wrought iron pipe for the homes plumbing. Contractor inadvertently used several different suppliers of pipe. Homeowner refused to pay for the remainder of the contract.
Contractor agrees that expectation damages should be paid
• Contractor says expectation should be measured by the diminution of value
• Homeowner says expectation is the cost of replacement/rebuilding
Generally the market value of something is larger than the cost of completion
• Say you contract with a gardner to landscape for $5000, this would increase the value of your home by $10000. Gardner breaches
– If the cost of completion is less than diminution of value than court will award cost of completion ie the $5000 to hire a different gardner, in order to put the non breacher in the same position as if K were completed.
What happens, as in the Kent case, when cost of completion is more than the diminution of value?
• Kent should not receive the full cost of completion because he would realistically have been enriched by the situation
Court awards Kent the difference/diminution in value because
– It was not a material breach and did not frustrate the purpose of the K
– The cost to replace all the piping was grossly and unfairly out of proportion as compared to the diminution of value to the house
Was the breach in this case a condition, promise, or a promissory condition