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.
8 Connecticut. Daly v. New Haven Hotel Co., 91 Conn. 280, 09 Alt. 853.
Illinois. Keeler v. Herr, 157 III. 57, 41 N. E. 750.
Kansas. MacCullough v. Hayde, 82 Kan. 734, 109 Pac. 176; Lofsted v. Bohman, 88 Kan. 600, 129 Pac. 1168.
Massachusetts. Burke v. Coyne, 188 Mass. 401, 74 N. E. 942.
Michigan. Phelps v. Beebe, 71 Mich. 554, 39 N. W. 761.
Missouri. Haysler v. Owen, 61 Mo. 270.
New York. Flaherty v. Miner, 123 N. Y. 382, 25 N. E. 418.
Oregon. Edmunds v. Welling, 57 Or. 103, 110 Pac. 533.
Utah. Foulger v. McGrath, 34 Utah 86, 95 Pac. 1004.
Wisconsin. Foeller v. Heintz, 137 Wis. 169, 24 L. R. A. (N.S.) 327, 118 N. W. 543; Buchholz v. Rosenberg, 163 Wis. 312, 156 N. W. 946.
"In the determination of the amount of deduction which ought to be made in the application to specific cases of the rule stated, regard must be had to the circumstances which each presents. A different method, for instance, is required to accomplish the ends of justice where the shortcomings are such as may be remedies and completion according to the contract had without substantial interference with the structure of the building than where the remedy and completion involve substantial structural changes. In the first case, and that upon the finding is this case, the approved method under ordinary conditions is to deduct from the contract price such sum as it would cost to make the work comply with the contract. In the latter case, the amount of deduction might be measured by the diminished value of the building to the owner by reason of the defects. In any case, the deduction is to be so determined that the owner's resultant payment will be fair and reasonable compensation with reference to the contract price for what of value to him he has received and no more, and that the contractor shall receive a fair reward determined by the contract standard for the benefit conferred by him in his attempt to execute the contract." Daly v. New Haven Hotel Co., 91 Conn. 280, 99 Atl. 853.
"The 'contractor is entitled to recover the contract price, less such deductions therefrom as will make good to the proprietor the imperfections In the work. Such equivalent for the imperfections and the substantially completed work are regarded as affording the proprietor the full performance of the contract to which he is entitled. So far as the imperfections can be remedied without any great sacrifice of work and material wrought into the subject of the contract and the proprietor's property, the contract price is to be reduced by so much as will measure the reasonable cost of applying such remedy; and otherwise the contract price is to be rebated to the extent of the diminished value of the subject of the contract by reason of the defects.' " Manning v. School District, 124 Wis. 84, 102 N. W. 356 [quoted in Foeller v. Heintz, 137 Wis. 169, 118 N. W. 543].
9 See 5 2794.
10 Connecticut. Pinches v. Swedish Evangelical Lutheran Church, 55 Conn. 183, 10 Atl 204.
Georgia. Small v. Lee, 4 Ga. App. 305, 01 S E 831.
Massachusetts. Cullen v. Sears, 112 Mass. 209.
New Hampshire. Danforth v. Freeman, 69 N. H. 400, 43 Atl. 021.
Oregon. Edmunds v. Welling, 57 Or. 103, 110 Pac. 533.
Wisconsin. Sherry v. Madler, 123 Wis. 621, 101 N. W. 1095; Buchholz v. Rosenberg, 103 Wis. 312, 156 N. W. 940.
11 Iron Clad Mfg. Co. v. Stanfleld, 112 Md. 300, 70 Atl. 854.
12 Daly v. New Haven Hotel Co, 91 Conn. 280, 99 Atl 853.
13 Norcross Bros. Co. v. Vose, 199 Mass. 81, 85 N. E. 468.
'The finding of the auditor that the concrete floors were not constructed in accordance with the specifications was unquestioned. Not only was the alignment imperfect and the workmanship poor, but the material used for top-ping, instead of being composed of the ingredients specified, showed the presence of foreign substances, which not only detracted from the appearance of the floors, but being imbedded in their surface became loose as the floors were used, leaving small cavities, which as a source of dust seriously depreciated the value of the building for use as a piano factory. The plaintiff having failed to comply with the contract, and the defective work not having been accepted, the defendant could recoup as damages the difference between the value of the floors if they had been built as designed, and their value as built and left by the plaintiff. Burke v. Coyne, 188 Mass. 401, 405, and cases cited. Eastern Expanded Metal Co. v. Webb Granite & Construction Co., 195 Mass. 356
In some cases, however, it has been said that the measure of recovery is the reasonable value to the owner of the performance which is furnished as long as such reasonable value does not exceed the contract price;14 or it has been said that the amount of recovery is such reasonable value less the deductions necessary to complete the contract,15 or less the cost of correcting the defective work as far as it could be corrected reasonably.16 This measure of recovery may be allowed in jurisdictions in which a party who is in default may recover reasonable compensation for the value of the performance which he has furnished, without regard to the contract.17 It should not, however, be applied in cases of substantial performance, since, if the substantial performance is to be given effect, the contract should be the measure of the recovery and not the reasonable value of the performance furnished thereunder. If the performance is regarded as substantial, and if substantial performance is to be regarded as analogous in any way to complete performance, each party should be given the benefit of the bargain into which he has entered; and the parties should not be treated as if the contract had been discharged without performance, leaving the rights of the parties to be adjusted on the theory of quasi-contract.
"This general rule was given and fully explained. The jury, however, had viewed the premises, and what they had seen as to the condition of the surface and general character of the work being evidence of its value to be considered with other testimony, the judge directed their attention to the defendant's position, that the only feasible way in which the floors could be rendered serviceable was to reconstruct the surface by putting on the finish called for by the contract. Smith v. Morse, 148 Mass. 407, 409, 410. They then were instructed, if they found that, instead of using the floors as they had been left, resurfacing was not only a reasonable but a practical method of repairing the defects, their estimate of the cost would measure the extent of the damages. But if they deemed such repairs to have been inexpedient, or the evidence was insufficient to enable them to estimate the probable expense, they were to give the matter no further consideration. These instructions being the equivalent of saying that, the plaintiff having broken the contract, the damages suffered by the defendant were measured by the difference between the value of the floors when finished in accordance with the specifications and their value in the condition in which the plaintiff left them, the plaintiff has no just cause for complaint. Veazie v. Hos-mer, 11 Gray 306; Olds v. Mapes-Reeve Construction Co., 177 Mass. 41, 43; Hebb v Welsh, 185 Mass. 335, 337. By the terms of the report the verdict is to stand." Norcross Bros. Co. v. Vose, 100 Mass 81, 85 N. E. 468.
1 4 Estep v. Fenton, 66 111. 467; Norwood v. Lathrop, 178 Mass. 208, 59 N. E. 650.
15 Hooper v. Cuneo, 227 Mass. 37, 116 N. E. 237.
16 Danforth v. Freeman, 69 N. H. 466, 43 Atl. 621.
17 See ch. LXXXVIII.
In some of the cases at least in which performance is referred to as substantial performance, the courts really mean that the performance is short of substantial performance, but that the adversary party with full knowledge of the defects and omissions in performance has elected to accept the performance which is tendered to him. Cases of this sort are to be explained by the doctrine of waiver, so called,18 rather than on the theory of substantial performance in the correct sense of the term.