Asked by Alicia Lankford on May 01, 2024
Verified
Floors n' More Inc. hires Gordo to renovate Floors n' Mores showroom. Gordo submits plans that Floors n' More approves. Gordo completes the major reconstruction, paints the interior, and buys the fixtures and furnishings. Floors n' More rejects some of these items because they do not match the plans, and subsequently refuses to allow Gordo to finish the work or to collect payment. Could Gordo sue successfully for payment for the entire contract?
Major Reconstruction
Involves significant rebuilding or making extensive repairs to a structure or infrastructure, usually to restore its usability or to improve its functionality.
Fixtures
Items that are originally personal property but become real property when attached in a permanent manner to real estate.
Furnishings
Items designed to make a space such as a room or building suitable for living or working in, including furniture, floor coverings, and decorations.
- Evaluate the rights to payment under a contract despite partial unfulfilled obligations.
Verified Answer
ZK
Zybrea KnightMay 06, 2024
Final Answer :
No, Gordo could not sue successfully for payment for the entire contract, but he could sue successfully to collect for the value of the work actually performed.
When the performance on a construction contract is substantial, the deviations are minor, and the failure to perform completely is not willful (that is, the performance is in good faith), the party who substantially performed is entitled to collect payment for that performance. The amount of the payment is the contract price less the costs to make the performance complete. When the cost to complete the performance is high in relation to the contract price, the party is entitled to the contract price less the amount by which the object of the contract is diminished in value by the failure to completely perform.
In this problem, the "breach" may have been so minor that it was no breach at all, because Floors n' More was not denied the benefit of its bargain by Gordo's conduct. In that interpretation, Floors n' More rejected Gordo's good faith tender of complete performance, and this rejection would allow Gordo to collect payment for the work.
When the performance on a construction contract is substantial, the deviations are minor, and the failure to perform completely is not willful (that is, the performance is in good faith), the party who substantially performed is entitled to collect payment for that performance. The amount of the payment is the contract price less the costs to make the performance complete. When the cost to complete the performance is high in relation to the contract price, the party is entitled to the contract price less the amount by which the object of the contract is diminished in value by the failure to completely perform.
In this problem, the "breach" may have been so minor that it was no breach at all, because Floors n' More was not denied the benefit of its bargain by Gordo's conduct. In that interpretation, Floors n' More rejected Gordo's good faith tender of complete performance, and this rejection would allow Gordo to collect payment for the work.
Learning Objectives
- Evaluate the rights to payment under a contract despite partial unfulfilled obligations.