Business Law 13th Edition by Frank Cross, Kenneth Clarkson, Roger LeRoy Miller

Exercise 9

BACKGROUND AND FA CTS?The plaintiff, Jacob Youngs, Inc., was a builder that had contracted with George Kent to construct a country residence for him. A specification in the building contract required that "all wrought-iron pipe must be well galvanized, lap welded pipe of the grade known as 'standard pipe' of Reading manufacture." Jacob Youngs installed substantially similar pipe that was not of Reading manufacture. When Kent became aware of the difference, he ordered the builder to remove all of the plumbing and replace it with the Reading type. To do so would have required removing finished walls that encased the plumbing-an expensive and difficult task. The builder explained that the plumbing was of the same quality, appearance, value, and cost as Reading pipe. When Kent refused to pay the $3,483.46 still owed for the work, Jacob Youngs sued to compel payment. The trial court ruled in favor of Kent. The plaintiff appealed, and the appellate court reversed the trial court's decision. Kent then appealed to the Court of Appeals of New York, the state's highest court.
IN THE LANGUAGE OF THE CO URT CARDOZO,
Justice.
* * * * * * * The courts never say that one who makes a contract fills the measure of his duty by less than full performance. They do say, however, that an omission, both trivial and innocent, will sometimes be atoned [compensated] for by allowance of the resulting damage, and will not always be the breach of a condition[.] [Emphasis added.]
* * * Where the line is to be drawn between the important and the trivial cannot be settled by a formula. * * * We must weigh the purpose to be served, the desire to be gratified, the excuse for deviation from the letter, [and] the cruelty of enforced adherence. Then only can we tell whether literal fulfillment is to be implied by law as a condition. [Emphasis added.]
* * * We think the measure of the allowance is not the cost of replacement, which would be great, but the difference in value, which would be either nominal or nothing. * * * The owner is entitled to the money which will permit him to complete, unless the cost of completion is grossly and unfairly out of proportion to the good to be attained.
DECISION AND REMEDY?New York's highest court affirmed the appellate court's decision, holding that Jacob Youngs had substantially performed the contract.
IMPACT OF THIS CASE ON TODAY 'S LAW?At the time of the Jacob Youngs case, some courts did not apply the doctrine of substantial performance to disputes involving breaches of contract. This landmark decision contributed to a developing trend toward equity and fairness in those circumstances. Today, an unintentional and trivial deviation from the terms of a contract will not prevent its enforcement but will permit an adjustment in the value of its performance.
THE LEGAL ENVIRONMENT DIMENSION?The New York Court of Appeals found that Jacob Youngs had substantially performed the contract. To what, if any, remedy was Kent entitled?