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.
Issue. Is Cardozo’s formula applicable here?
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.
Even where the defect arising from the breach of contract is so substantial as to render the finished building partially unusable and unsafe, the measure of damages is the market price of completing or correcting the performance.View Full Point of Law