Substantial Performance. Grane, a homeowner, contracted with ...

[schs14]

Substantial Performance. Grane, a homeowner, contracted with Butkovich & Sons, Inc, to enlarge Grane's basement and build a new room over the remodeled basement area. Butkovich was also to lay a new garage floor and construct a patio. The parties agreed to a price of 19,290 for the work. When the construction was completed, Grane refused to pay the contractor the 9,290 balance he still owed, claiming that Butkovich had failed to install water stops and reinforcing wire in one concrete floor, in accordance with Grane's specifications, and that the main floor of the addition was 8 7/8 inches lower than the plans had called for. Butkovich sued Grane for recovery of the 9,290. As a mortgage holder on the property, the State Bank of St. Charles was named co-defendant by Butkovich, because its interests would be affected by a judgment against Grane if the latter could not pay. Butkovich claimed that it had substantially performed the contract. Grane claimed that performance was of poor quality and that failure to follow contract specifications constituted a material breach. Discuss who should win.

Question 2

The duty of an agent not to mix personal funds with the funds of the principal is the duty:
 a. to account b. of loyalty c. to notify
  d. to perform
  e. none of the other choices, unless instructed not to do this

[meganlapinski]

Answer to Question 1

Substantial performance
The ordinary rule applied in cases involving building contracts is that a builder is not required to perform perfectly. Rather, the builder is held only to a duty of substantial performance. The purchaser who receives substantial performance of a building contract must pay the contract price, less compensation for any deficiencies created by the less than strict performance of the contract. A contractor whose work amounts to less than substantial performance, however, has no right to the contract price; in that situation, the builder's right is, under a theory of quantum meruit, a right to recover only reasonable compensation for value received by the purchaser over and above the injury suffered by the builder's breach. The court held that from the evidence of poor quality and omissions in fulfilling the specifications, it is clear that the plaintiff did not substantially perform the contract. The case was remanded to the trial court to determine the liability of the parties.

Answer to Question 2

a