Build did complete half of the construction; Homer will probably be entitled to damages amounting to the value Of his work. Anticipatory Repudiation Occurs when a party unequivocally repudiates his duty to perform, before the performance is due. Performance was due by December 1, and Build walked off the job on November 1, telling Homer “the job is not going to be profitable” and “besides the trout are biting at Clear Lake. ” The facts show that Build has repudiated by walking off the job. Damages If a breach is considered material, the breach recipient can cancel the contract and sue for damages.
However, there must actually be damages before such relief can be granted. Damages in a contract case are generally determined by examining a party’s expectation interest. That is, the breach recipient is entitled to damages measured by how much in money damages would be required to put the party in the same position as if the contract had been properly performed. Homer has no damages unless the costs and expenses to complete the cabin will exceed the original contract price $200,000) Homer expected to pay.
Cost of Completion Homers cost to complete construction was $110,000. In addition, he will also have a $20,000 cost to replace the fireplaces. A party is required to mitigate damages, but the law only requires reasonable efforts to mitigate. Assuming the parole evidence rule does not bar admission of Homer’s testimony regarding an oral understanding that the floor and window coverings were part of the contract, Homer could also add an additional $1 5,000 for the extra cost he must now incur for these items. Parole
Evidence Rule: The purpose of a contract is to establish the agreement that the parties have made and to fix their rights and duties in accordance with that agreement. The courts must enforce a valid contract as it is made, unless there are grounds that bar its enforcement. The courts may not create a contract for the parties. When the parties have no express or implied agreement on the essential terms of a contract, there is no contract. Courts are only empowered to enforce contracts, not to write them, for the parties. A contract, in order to be enforceable, must be a valid.
The function of the court is to enforce agreements only if they exist and not to create them through the imposition of such terms as the court considers reasonable. Homer could also recover some damages for the delay and inconvenience caused by Ballad’s breach, plus any consequential damages ($1 ,OHO) for having to rent another cabin, assuming Build was aware or had reason to foresee that Homer might have to rent another cabin if Build failed to complete on time. Even with all these items added together, the extra costs incurred as a result f the breach are not in excess of $200,000.
Homer would not be entitled to any damages from Build. Ballad’s Recovery Traditional rule: Under the traditional and still majority view, the court will not grant any recovery to a party who has committed a willful breach Of contract. Damages are not available, unless the other party has also breached. Quasi-contract recovery is also not available under the theory that the willful breach or should not benefit as a result a voluntary decision to breach. Minority Rule Under the minority view adopted by a growing number of states, the reaching party may be entitled to restitution recovery in quasi-contract.
Under this rule, Build may recover in quasi-contract/restitution for value of benefit conferred on Homer less any damages caused by breach. Damages The damages caused by Ballad’s breach include the $20,000 for the fireplace work plus some reasonable amount for the two months of delay. There would also be a $1 5,000 deduction from Ballad’s recovery for the cost of the floor and window covering, but only if the evidence or the oral agreement is admissible under the parole evidence rule.
Under the parole evidence rule, evidence of any prior or contemporaneous agreements are not admissible to contradict a material term of a final completely integrated written agreement since it covered all stages of construction. However, it failed to mention the floor and window coverings. On this basis, it could be deemed an incomplete agreement and permit parole evidence to supplement the terms of the written contract. If so, the oral agreement is admissible as proof that the window and floor coverings were intended to be included as part of $200,000 agreement.