This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
If a party to a contract receives benefits thereunder, with knowledge of breach by the adversary party,1 or if, after knowledge of such breach, he retains such benefits,2 he should account at least for a reasonable compensation therefor. Thus voluntary acceptance of an electric light plant,3 or of a job of electric wiring,4 or a waterworks,5 which does not substantially comply with the contract, renders the party so accepting liable for a reasonable compensation therefor. So accepting and retaining machines not built in compliance with the contract makes the vendee liable for their value as chattels.6 So one who delivers brick,7 or other goods,8 under a contract where such delivery is not a full performance of such contract, but the vendee accepts such goods, may recover a reasonable compensation therefor. So accepting work done in grading and constructing streets and sidewalks after failure of the contractor to complete the work within the time agreed upon, creates a liability to pay a reasonable compensation for the work done.9 So accepting books from one who has agreed to clean and bind them for a certain price, makes the owner so receiving them liable for a reasonable compensation if the contract has not been performed fully by the adversary party.10 In such an action the adversary party cannot recover liquidated damages under a clause in the original contract providing therefor.11 Some authorities hold, however, that if goods are delivered or work done before the contract is broken, the party in default cannot recover therefor after such breach, even if the adversary party could return the property or the benefits thereof if he wished. Thus if delivery of a specified quantity is to be made in installments, and, after partial performance, the vendor refuses to deliver the full amount stipulated iu the contract, it has been held that no recovery in quantum meruit can be had for the amount deliveied.12 Other examples of the application of the principle last mentioned are found where money has been paid under a contract by one who then refuses full performance, and his right to recover such money is denied.13 If, on the other hand, he received the benefits without knowing of the breach, and if the benefits are of such sort that it is impossible for him to return the benefits to the adversary party, it is difficult to see why the party not in default should be held for liability which he did not assume by his contract. Thus it has been held that as the owner of land on which a house has been built has no real choice in accepting or rejecting it, he is not liable to pay a reasonable compensation therefor if it does not comply with the contract at least substantiallv.14 So if a subscription is made to a board of trade building, payable if the building is completed by a subsequent time, no recovery can be had if the building is not completed until a later time, even if the value of the subscriber's property is increased thereby.15 Some authorities, however, hold that if the owner uses the building for his own benefit he is liable for the reasonable value of the work, labor and material therefor, even if the contract has not been complied with.16
3 Davis v. Badders, 95 Ala. 348; 10 So. 422; Lyon County School District v. Lund, 51 Kan. 731; 33 Pac. 595; Wabaunsee County School District v. Boyer, 46 Kan. 54; 26 Pac. 484.
4 Gillis v. Cobe, 177 Mass. 584; 59 N. E. 455.
5 McDonough v. Marble Co., 112 Fed. 634; 50 C. C. A. 403.
6 Ricks v. Yates, 5 Ind. 115; Pix-ler v. Nichols, 8 la. 106; 74 Am. Dec. 298; Duncan v. Baker, 21 Kan. 99; Lamb v. Brolaski. 38 Mo. 51; Parcell v. McComber, 11 Neb. 209; 38 Am. Rep. 366; 35 Am. Rep. 476; 7 N. W. 529; Britton v. Turner, 6 N. H. 481; 26 Am. Dec. 713; Bedow v. Tonkin, 5 S. D. 432; 59 N. W. 222; Riggs v. Horde, 25 Tex. Supp. 456; 78 Am. Dec. 584.
7 Saunders v. Short, 86 Fed. 225; 30 C. C. A. 462. So if other property. Watson v. Kirby, 112 Ala. 436; 20 So. 624.
1Katz v. Bedford, 77 Cal. 319; 1 L. R. A. 826; 19 Pac. 523; Walsh v. Jenvey, 85 Md. 240; 36 Atl. 817; 38 Atl. 938; Sykes v. St. Cloud, 60 Minn. 442; 62 N. W. 613; West v. Van Pelt. 34 Neb. 63; 51 N. W. 313; Simpson v. R. R., 112 N. C. 703; 16 S. E. 853; Smith v. Packard, 94 Va. 730; 27 S. E. 586; Empire, etc.. Co. v. Coke Co., 51 W. Va. 474; 41 S. E. 917.
2 Thompson Mfg. Co. v. Gunder-son. 106 Wis. 449; 49 L. R. A. 859; 82 N. W. 299.
3 Florence, etc.. Co. v. Hanby. 101 Ala. 15; 13 So. 343.
4 Smith v. Packard, 94 Va. 730; 27 S. E. 586.
5 Sykea v. St. Cloud, 60 Minn. 442; 62 N. W. 613: Sherman v. Connor. 88 Tex. 35; 29 S. W. 1053.
6 Thompson Mfg. Co. v. Gunder-son, 106 Wis. 449; 49 L. R. A. 859; 82 N. W. 299.
7 Barrett v. Coal Co., 51 W. Va. 416; 90 Am. St. Rep. 803; 41 S. E. 220.
8 Watson v. Kirby. 112 Ala. 436; 20 So. 624. (Less amount delivered than contracted for.)
9 Orem v. Keelty, 85 Md. 337; 36 Atl. 1030.
10 Walsh v. Jenvey, 85 Md. 240; 36 Atl. 817; 38 Atl. 938.
11 Orem v. Keelty, 85 Md. 337; 30 Atl. 1030.
12 Witherow v. Witherow, 16 Ohio 238.
13 See Sec. 1603.
14 Dermott v. Jones, 23 How. (U. S.) 220; Elliott v. Caldwell, 43 Minn. 357; 9 L. R. A. 52; 45 N. W. 845.
15 Cincinnati, etc., R. R. v. Ben-sley, 51 Fed. 738; 19 L. R. A. 796; 2 C. C. A. 480.
16 Lyon County School District v. Lund. 51 Kan. 731; 33 Pac. 595; Dixon v. Gravely, 117 N. C. 84; 23 S. E. 39.