Brief Fact Summary. Lowy (Plaintiff) appeal from a judgment in favor of United Pacific Insurance Co. (Defendant) for damages for breach of contract.
Synopsis of Rule of Law. When a person agreed to something for another for a sum of money to be paid on full performance, he is not entitled to any part of the money until he has done what he agreed, unless performance has been excused, delayed or prevented by the other party.
Issue. Whether the contract was divisible and the doctrine of substantial performance was applicable?
Held. Yes. Judgment affirmed.
Since the contract required the performance of two kinds of work and Defendant was to be paid a certain sum for the grading work and a sum to be determined according to the contract, the contract was divisible. Defendant was also required to post to separate surety bonds for the two different kinds of work performed.
Therefore, the fact that the Defendant did not perform the second phase of the contract does not prevent him form recovering for the work done. The Defendant did not fully perform the grading work, the first phase of the contract. The doctrine of substantial performance is applicable here, since the evidence shows that the Defendant performed 98% of the work under the first phase and prevented form completing the balance through the fault of the Plaintiff. When a person agrees to do something for a specified sum of money to be paid on full performance, he is not entitled to any part any part of the money until he has done what he agreed to do, unless performance is excused, prevented or delayed by the act of the other party. When an owner has taken possession of a building, if there has been substantial performance in good faith, if the failure to make full performance can be compensated in damages to be deducted from the price, and if the omissions and deviations were not fraudulen
t and do not affect the usefulness of the building, may recover the amount of contract price remaining unpaid less the amount allowed as damages for the failure of strict performance. Therefore, Plaintiff’s breached the contract and made full performance impossible on the Defendant’s part.
Discussion. To determine whether a contract is divisible the court must look at the intention of the parties which may be inferred from such factors as the ease with which the agreed consideration can be apportioned to separate performances, the fungibility of the performance and the lack of evidence that the parties would have refused to deal with less than whole.