Brief Fact Summary.
. This case involved the effect of a clause in a construction contract between Frank Grenier, John Grenier and Eugene Grenier (Plaintiffs), and Compratt Construction Company (Defendant). The clause entitled Plaintiffs to $25,500 upon the completion of certain subdivision roads, with “completion” to be proven by the issuance of a certificate of occupancy and a letter by the City Engineer stating that such certificate was being issued.
Synopsis of Rule of Law.
The enforcement of a condition depends upon a finding of the intent of the parties as evidenced by their agreement.
The fact that a contract states a date for performance does not necessarily make time of the essence.View Full Point of Law
The Plaintiffs brought an action to recover $25,500, and the Defendants answered with a counterclaim seeking to enforce the liquidated damages clause on the ground that the letter from the City Engineer was not provided.
The roads were satisfactorily completed by the June 30th deadline, but the Plaintiffs failed to provide the letter because the City Engineer refused to cooperate by writing one. The Plaintiffs were able to deliver a letter by the City Attorney by July 10th.
The trial court rendered judgment for the Plaintiffs for $23,000, plus interest; having found the Plaintiffs complied with contract requirement as of July 10th and Defendant was entitled to liquidated damages up to that date.
· Did the trial court fail to give full effect to the contract provision requiring a letter from the City Engineer?
· Did the trial court err in failing to fully enforce the agreement’s provision for liquidated damages?
No. There was no error.
· There was no contention that the Plaintiffs’ performance was wanting, and the engineer could have provided the certification but refused to do so. The trial court was warranted in finding that the letter itself was not a material part of the exchange. It was not the letter that was material, but what the letter represented—that the road was acceptable so that a certificate of occupancy could be issued.
· The Plaintiffs could recover, not because there was substantial performance, but full performance, the limiting condition having been removed.
· The Defendant was not injured by the trial court’s disapproval of the liquidated damages clause because he was awarded an offset that adopted the formula in the liquidated damages clause.
The Plaintiffs were entirely excused from the condition in the contract requiring a letter from the City Engineer because 1] he refused to provide it for them, and 2] their work was satisfactorily complete.