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Rivers v. Dean

    Brief Fact Summary. Defendant built an addition on Plaintiff’s house. Plaintiffs sued him because the third floor was unusable.

    Synopsis of Rule of Law. Cardozo’s rule, saying that damages should be the value of the structure built according to the contract minus the value of the structure as it was built is inappropriate when the defendant deviates seriously from the contract.

    Facts. Defendant built an addition on Plaintiff’s house. The third floor was unusable. Plaintiff had planned to use it as a bedroom and a bathroom. Plaintiffs sued Defendant for the unworkmanlike quality of the structure. The trial court awarded damages that were the difference between the market value of the structure and the market value of the structure if the addition had been built properly.

    Issue. Is Cardozo’s formula applicable here?

    Held. No.
    Cardozo’s formula, which says that damages should be the market value of the structure built according to the contract minus the market value of the structure the was built, is applicable where there is only slight variation from the contract. In this case, the structure is unusable and dangerous. Damages should be calculated using market value of the work needed to fix the problems.

    Discussion. Cardozo’s formula was founded in the case where the deviation from the contract, could be described as petty. In this, case, the problems were not petty and another formula should be used to determine damages-the market value of the work needed to set the structure to rights.


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