An examination of the cases in which a plaintiff in default is allowed to enforce a quasi contractual obligation shows that the judicial statement of the measure of damages is frequently, if not generally, inaccurate. In many cases it is declared that the plaintiff is entitled to recover the contract price, less the damages resulting to the defendant from the plaintiff's breach,3 or less the cost to the defendant of completing the work which the plaintiff had undertaken.4 Such a statement indicates a failure to distinguish the case under consideration from that of substantial performance. In fact, as has been pointed out {ante, Sec. 175), the two are essentially different. For in the latter the obligation is contractual and the action is to recover the agreed price, while in the former the obligation is quasi contractual and the action is to recover the reasonable value of the benefit conferred by part performance. Of such reasonable value the price agreed upon is certainly evidence; but the two are not necessarily identical.

1 Wheeler v. Mather, 1870, 56 111. 241; 8 Am. Rep. 683, (land); Downey v. Riggs, 1897, 102 la. 88; 70 N. W. 1091, (land); Hillyard v. Banchor, 1911, 85 Kan. 516; 118 Pac. 67, (land); Grimes v. Goud, 1887, (Me.) 10 Atl. 116 (land); Ketchum v. Evertson, 1816, 13 Johns. (N. Y.) 359; 7 Am. Dec. 384, (land); Page v. McDonnell, 1873, 55 N. Y. 299, (land); Lawrence v. Miller, 1881, 86 N. Y. 131 (land: plaintiff unable to raise money); Wright v. Smith, 1897, 13 App. Div. 536; 43 N. Y. Supp. 728, (contract to erect a building bearing plaintiff's name); Beveridge v. West Side Const. Co., 1909, 130 App. Div. 139; 114 N. Y. Supp. 521, (land); Hathaway v. Hoge, 1885, (Pa.) 1 Atl. 392, (land: plaintiff bankrupt); Sanders v. Brock, 1911, 230 Pa. St. 609; 79 Atl. 772, 35 L. R. A. (N. S.) 711, (land); Estes v. Browning, 1853,

11 Tex. 237; 60 Am. Dec. 238.

2 Cherry Valley Iron Works v. Florence Iron Co., 1894, 64 Fed. 569;

12 C. C. A. 306; 22 U. S. App. 655, (ore); Michigan Yacht Co. v. Busch, 1906, 143 Fed. 929; 75 C. C. A. 109, (contract for purchase of yacht to be built by defendant); Gilbreth v. Grewell, 1859, 13 Ind. 484; 74 Am. Dec. 266, (land). And see Davis v. Barada-Ghio Real Estate Co., 1905,115 Mo. App. 327; 92 S. W. 113, 118, (land).

3 Richards v. Shaw, 1873, 67 111. 222, (sale of goods); Byerlee v. Mendel, 1874, 39 la. 382, 386, (services); Hayward v. Leonard, 1828, 7 Pick. (Mass.) 181; 19 Am. Dec. 268, (building contract: but see Gillis v. Cobe, 1901, 177 Mass. 584; 59 N. E. 455); Bowker v. Hoyt, 1836, 18 Pick. (Mass.) 555, (sale of goods); McMillan v. Malloy, 1880, 10 Neb. 228, 234; 4 N. W. 1004; 35 Am. Rep. 471, (threshing contract: but see Murphy v. Sampson, 1902, 2 Neb. (Unof.) 297; 96 N. W. 494); Hildebrand v. The American Fine Art Co., 1901, 109 Wis. 171, 179-182; 85 N. W. 268; 53 L. R. A. 826, (services). See Clark v. Moore, 1853, 3 Mich. 55, (sale of goods).

4 McClay v. Hedge, 1864, 18 la. 66, (building contract); AEtna Iron Works v. Kossuth County, 1890, 79 la. 40, 46; 44 N. W. 215, (building

In the Massachusetts case of Gillis v. Cobe,1 there is an implication, at least, that the measure of recovery, in the case of a building which has been constructed in good faith but not in accordance with the requirements of the contract, is "the fair market value of the building as it now exists." The objection to this is that the market value of the building may be much less than the value of the plaintiff's labor and materials, not because of the plaintiff's failure to fulfill the requirements of the contract, but because of the poor judgment of the defendant in planning the building, or for other causes. As was said in a dissenting opinion by Judge Knowlton :2

"Whether the investment in the building turns out profitably or improfitably to the owner, is of no consequence. ... If, through bad management, miscalculation or misfortune for which the builder is not responsible, the owner is unable profitably to use the building for the purpose for which it was intended, this cannot be shown to diminish the sum to be recovered. A building may be so constructed for use in a particular kind of business that it would be worth but little for any other use, and before it was completed the business may become unprofitable, and the building be of little value on that account. No one will contend that in such a case the recovery of the builder is to be limited by the value of the building to the owner."

Another frequent statement of the measure of recovery is that the plaintiff is entitled to the value of his part performance, contract); Hillyard v. Crabtree, 1854, 11 Tex. 264; 62 Am. Dec. 475, not exceeding the contract price, less the damages suffered by the defendant.1 Whether the words "not exceeding the contract price " are intended to mean that the plaintiff's part performance must not be given a value greater than the price agreed upon for full performance, or that in computing the value of the plaintiff's part performance the rate of compensation fixed by the contract must not be exceeded, is not always clear. But under either interpretation the limit established by this statement of the rule is not the true one. The underlying notion is that whatever may be the actual value of the defaulting plaintiff's part performance, the defendant, who is not in default, should under no circumstances be charged for such part performance at a rate higher than that which his contract indicates that he was willing to pay. It is not the aggregate contract price, therefore, which should limit the plaintiff's recovery, but such a proportion of the contract price as the value of the part performance bears to the value of full performance.2 And while this is ordinarily equivalent to the statement that in computing the value of the plaintiff's performance the rate established by the terms of the contract must not be exceeded, such is not the case where the contract stipulates a flat rate for services or materials, the various parts or units of which differ in value. This is explained and illustrated in the chapter dealing with the quasi contractual rights of one whose default is excused by impossibility (ante, Sec. 125).


1 1901,177 Mass. 584, 59 N. E. 455. 2 At page 602.

1 United States v. Molloy, 1906, 144 Fed. 321; 75 C. C. A. 283; 11 L. R. A. (N. S.) 487, (sale of goods); Davis v. Badders, 1892, 95 Ala. 348; 10 So. 422, 423, (building contract); Gibboney v. R. W. Wayne & Co., 1904, 141 Ala. 300; 37 So. 436, (sale of goods); Pinches v. Swedish Church, 1887, 55 Conn. 183; 10 Atl. 264, (building contract); Duncan v. Baker, 1878, 21 Kan. 99, 106, 109, (service); McKnight v. Bertram Heating, etc., Co., 1902, 65 Kan. 859; 70 Pac. 345, (heating plant); White v. Oliver, 1853, 36 Me. 92, (building contract); Lawrence v. Gullifer, 1854, 38 Me. 532, (service); Allen p. McKibben, 1858, 5 Mich. 449, (cutting and hauling timber); Eaton v. Gladwell, 1899, 121 Mich. 444, 449; 80 N. W. 292, (building contract); Yeats v. Ballentine, 1874, 56 Mo. 530, 534, (plumbing contract); Decker v. School District, 1903, 101 Mo. App. 115; 74 S. W. 390, (building contract); Danforth v. Freeman, 1898, 69 N. H. 466; 43 Atl. 621, (building contract); Gove v. Island City, etc., Co., 1890, 19 Or. 363; 24 Pac. 521, (building contract); Bedow v. Tonkin, 1894, 5 S. D. 432; 59 N. W. 222,224, (service); Mas-sey v. Taylor, Wood & Co., 1868, 5 Coldw. (45 Tenn.) 447; 98 Am. Dec. 429, (service); Carroll v. Welch, 1861,26 Tex. 147, (service: court cites Hillyard v. Crabtree, supra, as standing for same rule); Viles v. Barre, etc., Power Co., 1906, 79 Vt. 311; 65 Atl. 104, (sale of electric current). See Germain v. Union School District, 1909, 158 Mich. 214, 218; 122 N. W. 524; 123 N. W. 798, where it is said that the plaintiff may recover the value of the building as defendant took possession of it, not exceeding the contract price, less the cost of making it comply with the contract. This is clearly wrong.

2 See McKinney v. Springer, 1851,3 Ind. 59,65,67-9; 54 Am. Dec. 470.

Accurately stated, then, the measure of recovery is the reasonable value of the plaintiff's part performance, not exceeding such proportion of the contract price for full performance as the value of the part performance bears to the value of full performance, less the damages resulting to the defendant from the plaintiff's breach.