Brief Fact Summary. A contract called for the use of a specific brand of pipe in a home. The builder failed to use that specific brand of pipe throughout the entire home and the purchaser of the home wanted the non-conforming pipes replaced.
Synopsis of Rule of Law. Where a breach of a contract is minimal the remedy "is not the cost of replacement, which would be great, but the difference in value, which would be either nominal or nothing."
Parties may indeed stipulate in a contract to effectuate a purpose that performance of every term shall be a condition of recovery.View Full Point of Law
Issue. What is the proper remedy when a breach of a contract is trivial and innocent and not substantial?
Held. The failure to use Reading pipe was neither "fraudulent or willful", but the result of "oversight and inattention" by the Plaintiff's subcontractor. The only difference between Redding Pipe and pipes made by other manufacturers was the name on the pipe. The defect was "insignificant in its relation to the project." "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 for by allowance of the resulting damage, and will not always be the breach of a condition to be followed by a forfeiture." If the parties contract is silent on whether "literal fulfilment is to be implied by law as a condition … the law will be slow to impute the purpose, in the silence of the parties, where the significance of the default is grievously out of proportion to the oppression of the forfeiture." The individual who willfully violates the contract "must accept the penalty of his transgression", but "[t]he transgressor whose default is unintentional and trivial may hope for mercy if he will offer atonement for his wrong." As to damages, the court "[thought] 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 rule that gives a remedy in cases of substantial performance with compensation for defects of trivial or inappreciable importance, has been developed by the courts as an instrument of justice."
Dissent. "The plaintiff did not perform its contract. Its failure to do so was either intentional or due to gross neglect which, under the uncontradicted facts, amounted to the same thing, nor did it make any proof of the cost of compliance, where compliance was possible." "It is no answer to this suggestion to say that the pipe put in was just as good as that made by the Reading Manufacturing Company, or that the difference in value between such pipe and the pipe made by the Reading Manufacturing Company would be either 'nominal or nothing.' Defendant contracted for pipe made by the Reading Manufacturing Company. What his reason was for requiring this kind of pipe is of no importance. He wanted that and was entitled to it."
Discussion. This decision authored by Judge Cardoza in very important in that it distinguishes between breaches that are trivial and those that are significant and sets damage awards accordingly.