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Quasi Contract

A quasi-contract (or implied-in-law contract) is a fictional contract created by courts for equitable, not contractual purposes. A quasi-contract is not an actual contract, but is a legal substitute for a contract formed to impose equity between two parties. The concept of a quasi-contract is that of a contract that should have been formed, even though in actuality it was not. It is used when a court finds it appropriate to create an obligation upon a noncontracting party to avoid injustice and to ensure fairness. It is invoked in circumstances of unjust enrichment, and is connected with the concept of restitution. Generally the existence of an actual or implied-in-fact contract is required for the defendant to be liable for services rendered, and a person who provides a service uninvited is an officious intermeddler who is not entitled to compensation. Quasi-contracts are defined to be "the lawful and purely voluntary acts of a man, from which there results any obligation whatever to a third person, and sometime a reciprocal obligation between the parties." It "is not legitimately done, but the terms are accepted and followed as if there is a legitimate contract."

According to the Oklahoma pattern jury instructions, the elements of quasi-contract are: Plaintiff furnished / rendered valuable goods / services to Defendant with a reasonable expectation of being compensated; 1. and 2. Defendant would be unfairly benefited by the services / receiving the Defendant knowingly accepted the benefits of the goods / services;

goods if no compensation were paid to the Plaintiff. Knowledge, the second element, is required, and if the defendant had no knowledge of the benefits, there would be no contract of any kind, even a quasi-contract.


will require he defendant to restore it. no less than justice. A painter. even in the extended meaning borne by the word in the English law. and 2 . The owner of the house had learned the previous day that his neighbor was getting new sprinklers." according to one scholar. A mechanic who fixes the brakes to a car as requested.Contract compared In contracts. Under the general heading of the Quasi contract there has been grouped a number of cases which have little or no affinity with contract. he sees the plumber installing them in his own lawn. in quasi-contracts no consent is required. A simple illustration is afforded by the action to recover money paid by mistake. and then refuses to pay when the plumber hands him the bill. without being contracts. it is the consent of the contracting parties which produces the obligation. If that knowledge could not be proven. That morning. These acts are called quasi-contracts. the court would make him pay because of a quasi-contract. but who also makes repairs to the axle (without which the brakes would not function properly). can recover the cost of the services and materials from the homeowner. Pleased at the mistake. he would not be liable. Examples of quasi-contracts vary by jurisdiction. For a casual job. pays to the defendant a sum of money which he does not really owe. "A quasi-contract is not really a contract at all in the normal meaning of a contract. and the obligation arises from the law or natural equity. If the plaintiff on an erroneous interpretation of the facts. who mistakenly paints a house with the owner's knowledge. Will the man be held liable for payment? Yes. he says nothing. they bind the parties as contracts do. but rather is "an obligation imposed on a party to make things fair”. Examples An example of a quasi-contract is the case of a plumber who accidentally installs a sprinkler system in the lawn of the wrong house. law. but often a quasi-contract. But his obligation is manifestly not based upon the consent. because. has an implied quasi-contract. can sue in court to get paid. there is almost never a written contract. who actually has no authority. A homebuilder who signs a contract with a purported agent. if it could be proven that the man knew that the sprinklers were being installed mistakenly. on the facts of the case.

who is considered to be the real founder of such obligations. as Quasi Contractual Obligations. an another example for Quasi Contract would be worthy of Quoting for the better understanding of Quasi Contract. But as soon as the urge was felt to explore their juristic basis. His Lordship offered this explanation in Moses v. for the want of better or more appropriate name. This shows that a person cannot entertain unjust benefits at the cost of some other person. although he has not broken any contract nor committed any tort. such kind of obligations are generally described. This shows that there are many situations in which Law as well as justice require that a certain person be required to conform an obligation. The first and the most ambitious attempt to provide such a basis was made by Lord Mansfield in Moses v. but they evaded the odious task of rationalization. that is if a person in whose home certain goods have been left by mistake is bound to restore them.that is enrichment of one person at the cost of another. explained them on the principle that Law as well as Justice should try to prevent “Unjust Enrichment”.its description as a quasi contractual liability serves only to emphasize its remoteness from any genuine conception of contract. controversy was born. Macferlan: Facts of the case:- 3 . Macferlan in year 1760 Thus it was Lord MANSFIELD. Rationale So far as there was not an established rule of Quasi Contractual obligation the English Lawyers were content to enumerate the cases of the Quasi Contract for which they are provided a remedy as to many species of “indebitatus assumpsit”. This would be better to explain it up that Quasi contract consists of the Contractual Obligation which is entered upon not because the parties has consented to it but because law does not allow a person to have unjustified benefit at the cost of other party.

69] 4 . He was allowed to do so. But the English cases do provide valuable guidance:  Not only as to the scope of the relief But also as to the way the provisions should be interpreted to keep them in tune with the changing notions of justice. or upon a consideration which happens to be fail. or for money got through imposition.  Provisions under Indian contract law Section 68 to 72 of the Indian Contract Act 1872 provides for five kinds of quasi-contractual obligations they are as follows:1. Even so Macferlan sued Moses on the endorsement and he was held liable despite the agreement. by a written agreement. he stated that “here it lies for the money paid by mistake. or oppression. therefore. Moses was thus compelled to discharge a liability which he had excluded and. his personal liability on the endorsement. sued to recover back his money from Macferlan. or for an undue advantage taken off the plaintiff’s situation. 68] Payment by interested person [sec. After making the defendant liable to restore the money Lord MANSFIELD continued as follows: After stating that such money cannot be recovered where the person to whom it is given can “retain it with a safe conscience”. 2.” Position of Quasi Contract in Indian Law Chapter V of the Indian contract Act 1872 deals with the situations qualifying the quasi contractual obligations under the heading “Of certain relations resembling to those created by contract”. upon the circumstances of the case. The chapter avoids the words “quasi contract”. and in view of the clear statutory authorization of the courts in India is not hindered in allowing relief under the different sections of the Act by the theoretical considerations concerning quasi contracts. or extortion. In one word the gist of this kind of action is that the defendant.One Jacob issued four promissory notes to Moses and the latter indorsed them to Macferlan. excluding. Supply of necessaries [sec. contrary to laws made for the protection of the persons under those circumstances. is obliged by ties of the natural justice and equity to refund the money.

supplies the wife and children of B. 4. A is entitled to be reimbursed from B’s property.[SECTION 68] Where necessaries are supplied to a person who is incompetent to contract or to someone who is legally bound to support. with the necessaries suitable to his condition in life. the supplier is entitled to recover the price from the property of the incompetent person. Liability to pay for non-gratuitous acts [sec. 70] Finder of goods [sec. Examples:a) A. with the necessaries suitable to their conditions in life. 3) Necessaries are supplied to a person who is incapable of entering into a contract or anyone whom he is legally bound to support. A is entitled to be reimbursed from B’s property. 5. a lunatic. the person who has furnished such supplies is entitled to be reimbursed from the property of such incapable person”.3. Section 68 reads as under: “If a person. b) A. Necessaries so supplied must be suited to the condition of life of that person to whom they are supplied. 5 . 4) The reimbursement is to be claimed from the property of that incapable person. is supplied by the another person with necessaries suited to his condition in life. Ingredients of the section:According to the language drawn upon by section 68 we got to know the following essentials to apply this section. Supplies to B. incapable of entering into a contract or anyone whom he is legally bound to support. 71] Mistake or coercion [sec. a lunatic. 72]  Supply of Necessaries :. 1) 2) Necessaries are being supplied.

in payment of which he is interested: . A is bound to make good to B the amount so paid. the consequences of such sale will be the annulment of B’s Lease. is entitled to be reimbursed by the other. and who therefore pays it.[SECTION 69] Reimbursement by a person paying money due by another. his land is advertised for the sale by the government. The Revenue payable by A to the Government being in arrears. a payment by him of the others’ share would not give him a right of recovery under this section. Where a person is jointly liable with others to pay.A person who is interested in the payment of money. pays to the government the sum due from A. to prevent the sale and annulment of his own lease. to mean bound by law or by contract. 3) Defendant should be under a legal compulsion to pay:- Thirdly the defendant should have been “Bound by Law” to pay the money. which another is bound by law to pay. Payment by interested person :. It is not necessary that the liability should only be statutory. Under the Revenue Law. He should only be interested in making the payment only for the purpose of protecting his own interest. The words “bound by law” have been held after some hesitation. The interest which the plantiff seeks to protect must be of course legally recognizable. Illustration:B holds a land in Bengal. B. the Zamindar. In a judgment of Privy Council it 6 . 2) But should not be bound to pay:- The second essential condition is that it is necessary that the plantiff himself should not be bound to pay. on a lease granted by A. Conditions for Liability: The conditions for liability under this section may now be stated: 1) Payer must be interested in making payment: The first condition for establishing the liability is that the Plantiff should be interested in making payment.

a tradesman leaves his good at B’s place/home by mistake. B treats the goods as his own. He is bound to pay A for them. is subject to the same responsibility as a bailee. the thing so done or delivered. 7 .[SECTION 70] Obligation of a person enjoying benefit of a non-gratuitous act:. not intending to do so gratuitously. a finder is treated at par with bailee.was held that it is enough that “the defendant at the suit of any person might be compelled to pay” 4) Payment should be made by one party to some other person:- Lastly the Plantiff should have made payment to some other person and not to himself. Illustrations:a) A. Conditions of Liability under the section:a) b) A person should lawfully do something for another person or deliver something to him. or delivers anything to him. to restore. The finder’s position is therefore considered along with bailment.  Liability to pay for Non Gratuitous Acts :.”  Finder of Goods :. A is not entitled to compensation from B. In doing the said thing or delivering the said thing he must not intend to act gratuitously.[SECTION 71] Responsibility of finder of goods: A person. and such other person enjoys the benefit thereof. b) A saves B’s property from fire. and c) The other person for something is done or to whom something is delivered must enjoy the benefit thereof. Thus in respect of duties and liabilities. who finds goods belonging to some another and takes them into his custody. if the circumstances shows that he intended to act gratuitously. the latter is bound to make compensation to the former in this respect of.where a person lawfully does anything for another person.

it was not due.  Refund of Tax Money paid without being due:The Supreme Court in its decision in Sales tax Officer.[SECTION 72] Section 72 deals with the payments made or things delivered under mistake or coercion. “The Payment by Mistake” in section 72 must refer to a payment which was not legally due and which could not have been enforced: the “Mistake” is on thinking that the money paid was due when in fact. Liability of a person to whom money is paid. the Allahabad High Court ruled the levy of the sales tax on such transaction to be ultra virus. or things delivered. Sales Tax Law on its forward transactions and subsequently to the payment. Illustration: A and B jointly owe 100 rupees to C. “A” alone pays the amount to C and B. Mistake or Coersion:.  A railway company refuses to deliver up certain goods to the consignee except upon the payment of an illegal charge of carriage. by mistake or under coercion. There is nothing in section 72 to relate with that whether the mistake is of law or of a fact. by mistake or under coercion: . The consignee pays the sum charged in order to obtain the goods. not knowing the fact pays another 100 rupees to C. C is bound to repay the amount to B. must repay or return it.P. Banaras v Kanhaiya Lal Mukund Lal Saraf has accepted this interpretation of section 72. “A certain amount of the Sales Tax was paid by a firm under the U.  Mistake of Fact or Mistake of Law:- Money paid under mistake is recoverable irrespective of the fact that whether the mistake is of fact or of law. or anything delivered.A person to whom money has been paid. The firm sought to recover back the tax money. He is entitled to recover so much of the charge as was illegally excessive. 8 .

BOYNTON (1885) Facts: P. $1. may be recovered even though “coercion” as defined in sections 15 is not established. refused. who also did not recognize the identity or value of the stone. Issue(s): Is the P. Despite the fact that Quasi Contract is molded in the Indian Contract Act under a new name. Cases  WOOD V. Nature of the Risk(s): In the absence of explicit contractual statements otherwise.  Coersion:The word “coercion” used in this section is used in the general sense and not as defined in section 15. tendered the D. and demanded return of the stone.And as far as English. P. although she thought it might be a topaz. for $1. D. such as prevention of the execution of a decree on a property in which the party paying is interested. Conclusion:The principle of quasi contract is often ignored but still it holds a very important place. sold said stone to D. Upon finding out that the stone was actually a very valuable diamond. American and Australian Laws and their contentions are concerned they do not allow the payments made under mistake of law to be recovered. Thus the money paid under pressure of circumstances. Thus. the seller assumes the risk that he under-charged for an item. the basic nature and essence of the principles of the remains the same without any drastic change. brought suit. owned an rough and uncut stone she did not know the identity of.10. and the buyer assumes the risk that he over-paid for an item. P. Quasi contract forms an integral of the contracts Act and it definitely comes to an aid of the victim when the person enriched unjustly over the former. and so P. entitled to rescind the sale because she was ignorant as to the "hypothetical fair market value" of the stone she sold D.. since the principle is grounded on the principles of justice and equity.? 9 .

" Reasoning: Neither the P. agreed to provide enough water for 100 additional head of cattle. however. is the school board. was taken as advice and not a contract. The water supply failed. refused. demurred claiming no cause of action.Holding(s): "In the absence of fraud or warranty. either stated or implied. and lower court sustained. refused to pay. sued. D. Notes: The court overlooked the fact that D. the [hypothetical] value of the property sold. and the seller could not rescind the sale. Therefore.? Holding(s): "Contracts must be in certain terms and not so indefinite and illusory as to make it impossible to say just what is promised". P. was aware that P. is a father of high school students. as compared with the price paid. if he would put them to pasture on his land. D. requested D. Reasoning: The language between P.  ANDERSON V. of his house. Nature of the Risk(s): Both parties assume the risk of fulfilling exactly the terms of the contract. Issue(s): Was there a contract between P. was having difficulty "making ends meet" because the crop was poor on the farm land he leased from D. 10 . is no ground for recission of the sale. In addition.'s "advice"..  SOMMERS v. had induced him to do by relying on D. and so P. the risk was equally borne by both the buyer and the seller. appealed to this court. and D. provide high school facilities within 4 mi. D. PUTNAM BOARD OF EDUCATION (1925) Facts: P. as long as it remains possible to fulfill that contract. had any knowledge that the stone was a diamond. and P. bought the cattle. as the D. This would probably constitute a contract. and D. after which he presented the bill for transportation to D. alleges that D.500. as was the local public law. so there was no fraud. was damaged in the sum of $2. transported his children to school for 1 semester. BACKLUND (1924) Facts: P. D. P. however absurd or improbable. and so the then 174 head of cattle lost value due to starvation. and the P. nor the D. there was no agreement of warranty. and so the court concluded there was no contract. P.

failed to pay the schoolhouse rent. While the fire was still burning.. and so the Upton fire brigade was not under obligation to put it out for free. refused to pay for the service. Thus. When a person makes an "act of beneficial intervention" in discharging the duties of another.  UPTON-ON-SEVERN RURAL DISTRICT v.'s allege that 11 . Reasoning: The court reasoned that the fact that neither intended to enter into a contract was irrelevant. Issue: Was there a contract between the fire brigade and the farmer by implied promise of the farmer to pay if payment was required? Holding: Yes. The D. he may be held liable for a "quasi-contract" because he was benefited. The contract was created because the service was performed and therefore there was an implied promise to pay.  NOBLE v. The P. Nature of the Risk: You may contract by implied promise when you ask for assistance in protecting your property. or furnish necessary classroom materials. Issue: Was a there a contract between the father and the school board. they sued. Reasoning: The court reasoned that the school board had benefited inequitably. The Upton fire brigade showed up and began to put out the fire. there was a contract because of the beneficial intervention. WILLIAMS (1912) Facts: P. the parties resultantly enter into a contract. Parties create a contract by implied promise when one renders service that requires payment. The father was required to make sure that his children were in school.'s were teachers who were hired to teach public school. even though the other may not be aware that the service requires payment. When the D.Nature of the Risk: When a person does not perform his obligations. school board. and someone else fulfills his obligation for him. solely because the father benefited the school board by taking his children to school? Holding: Yes.'s barn was on fire and he called the local Upton police chief and asked him to send "the fire brigade". a neighboring fire chief came by and informed all that the farm was really in his district. so he was justified in performing the school's duties. POWELL (1942) Facts: D.

1. Issue: Was a there an implied contract between the teachers and the school board. Nature of the Risk: A person who commits resources by performing a service in the absence of the other committing resources. Notes: This case is in sharp conflict with Sommers where a school board was found to have contracted when someone fulfilled their obligations for them. runs the risk that he might not be compensated for his performance. claims that since the victim never gained consciousness. WISDOM (1907) Facts: Co-P. A person who receives medical care while in an injured and helpless position is liable for payment by way of implied contract when such medical care is provided in good 12 . demurred and circuit court sustained the demurrer.'s are physicians who performed an emergency surgery in an attempt to save the life of a accident victim who had fallen from a street car. there could have been no contract (not very good argument). and further say that the ability of the victim's estate to pay should have no bearing on the value of the services provided. which they allege to be customarily dependent on the victim's ability to pay. because they would be forcing the school board into a contract that the school board did not intend. "No man. Nature of the Risk: When a person does not perform his obligations. D. solely because the school board benefited from the teachers' actions? Holding: No. can make another his debtor". P. If so. Reasoning: The court reasoned that the teachers had no right to provide the supplies themselves and then demand payment. D. The victim never regained consciousness and later died. and 2.  COTNAM v. and someone else fulfills his obligation for him.'s are suing for the cost of performing the surgery. and so they sought to recover their costs in furnishing the schoolhouse. he may be held liable because he was benefited. Issue: 1. entirely of his own volition.they were therefore required to pay for the supplies themselves. is the administrator of the victim's estate. what was the value of the services they provided. The D. Was there a contract between the unconscious victim and the physicians?. Holding: Yes.

and that the court incorrectly instructed the jury. the court enforces what the contract would have been. In "implied in law" contracts. these are NOT requirements for the creation of a contract. Reasoning: The court distinguished between "implied in fact" contracts. However. and "implied in law" contracts. regardless of whether he expects his payment therefore to be in the form of immediate payment or future profits from an ensuing contract. once the FHA guarantee came through. Yes. In securing the FHA guarantee. Appellee incurred many costs which he expected would be offset by the profits from the construction contract. WAXBERG (1956) Facts: Appellant is a property owner who asked Appellee to assist him in securing a FHA guarantee for a construction loan. with the mutual understanding that the Appellee would be awarded the contract for construction if the FHA guarantee came through. no agreement or "meeting of the minds". The victim received a benefit which requires equitable compensation. negotiations on the construction contract broke down. and thus awards compensatory damages measured by the going contract rate. An implied in law contract results when one renders service at the request of another. where both parties acted as if they had contracted. The damages should be limited to the amount of the unjust enrichment. the court limits the damages to the amount of the unjust enrichment. Reasoning: 1. Although there was no negotiation. For "implied in fact" contracts. Nature of the Risk: The Appellee risked that he would have committed his time and money better had he not relied on the promise of a future construction contract. 2. where one party was unjustly enriched at the expense of the other. Appellant appealed stating the judgment was /excessive. Is there a contract? 2. without which the Appellant would not have secured the FHA guarantee. how should the damages be measured? Holding: 1.  HILL V. The court stated that either might apply in this case. 2. the court shifted that risk to the Appellant. The value of medical services rendered to a victim who cannot negotiate is reasonable compensation for the services rendered. The victim could not have contemplated the charges since he was unconscious. and Appellee sued for his costs and the value of his services. 2.faith. Issue: 1. The physicians provided competent medical care in good faith. and so this is an implied contract without a negotiated price where the only equitable determination of price would be the fair value of the service provided. but 13 . In constructing an "implied in law" contract. If so.

Issue: 1. who claims he never received notice of stoppage. would not pay for his newspaper. Nature of the Risk: In the absence of a contract. A contract implied in fact arises from the "presumed" intention of the parties when their actions indicate that both considered the contract to be in existence. who refused a gov't order to pay back wages at the higher rate. The damages for implied in fact contracts should be the reasonable value of the services. received and read a newspaper over the course of several years. They stated that the reasonable value of the services should be determined by taking into account the fact that the union was negotiating new wages. however they reversed the decision that the amount of the services should be measured at the old rate. If so. and the bus company fell bankrupt and into the hands of D.  MARTIN V. and the union was negotiating for higher wages while the drivers continued to work. Burge (1911) Facts: D.  Austin v. Nature of the Risk: In the absence of a contract. in anticipation of being paid back wages.since the lower court had decided that it was an implied in fact contract. he requested that service be stopped. An implied in fact contract would shift that risk to D. is liable for the cost of the newspaper subscription if it is understood that the newspaper is not free. Reasoning: The Court of Appeals agreed with the lower court that there was a contract "implied in fact". the damages would be the Appellee's costs and fees. and reads it. sued for back pay at the higher wage rate. In the year in question. assumed the risk that D. is the newspaper owner. bore the risk that he would only be paid at the previous rate after performing services that he expected would be paid at the higher wage rate. the P. the P. but claims that after the expiration of those two years. in reading the newspaper? Holding: One who accepts an unsolicited newspaper. the contract had not been renewed. The labor negotiations broke down. P. P. 14 . Was there a contract? 2. CAMPANARO (1946) Facts: P. was a bus driver for a company that contracted year-to-year with its drivers. Yes. Issue: Was there a contract implied by the conduct of the D. 2. He had at one time subscribed for a two-year period. what should the nature of the damages be? Holding: 1.

on a theory of quasicontract because the whole contract had failed. Nature of the Risk: Standard sale of goods risks. (1943) Facts: The P. However. The P. to buy some machines and have them delivered to Poland. the D. and claimed that the P.quasi contract. It seems that the announced theory of the case . began the construction of the machines. entitling the P. The burden would be on the P. but further performance of a contract becomes impossible due to events unanticipated by the parties and beyond their control. to recover any down payment. Ltd. Thus. liable for the subscription price. and held D. Poland was subsequently invaded by Germany. to deliver was an unconditional one.] Notes: In English law. The court reasoned that the contract was for delivery. but that failure of consideration prevented the contract from being formed at all. Under that view. to expectation damages. But these would be hard to calculate. they awarded restitution damages to the P..Reasoning: The court stated that although one cannot be forced into a contract unilaterally by the newspaper company. (Restitution Interest. the contract fails for lack of consideration. implied that he had to pay for it. Fairbairn Lawson Combe Barbour. the whole contract failed for lack of consideration. They were supposed to have made a down payment of 1/3 upon order. there has been a Law Reform (Frustrated Contracts) Act which attempts to make an equitable adjustment of the losses of the parties when performance is 15 . which he knew was not free. even though the D. Where the performance of a contract has begun.'s actions of reading the newspaper. sued to get his down payment back. [The promise by the D. was entitled to recovery.. Thus. Reasoning: The court expressly overruled Chandler v. not by release by implied condition. The court constructed a quasi-contract due to the D. to demonstrate how much it would have made if the machines were actually delivered.'s deriving benefit. they only sued for their down-payment. Issue: Is the subsequent impossibility of performance by the D. was a means to get the theory to match the request for reimbursement. Webster. had already gone to some expenditure to make the machines? Holding: Yes. sufficient to release the parties from further contractual liability. and any partial payment by the buyer is refundable. but paid somewhat less than that. is a polish company who expressly contracted with the D.  Fibrosa Spolka Akcyjna v. this is an express contract. the risk of invasion preventing delivery was never reallocated to the P. as well as entitle the P. and so when delivery became impossible. The D. which made it impossible to deliver the machines.

frustrated. Although the P. was entitled to exactly the kind of pipe that was stated in the contract. but rather may be remedied by the payment of damages. he is bound to make it good if he may."  Jacob & Youngs. risked that he could have a better house for less money. as well as the restitution interest of one who has pre-paid for services which have not yet been performed. The brand name of the pipe was not crucial to the building of the house.. The contract specification called for wrought iron pipe made by Reading. letting the losses fall where they may unless the parties have contracted otherwise. risked that he could be paid more for his building services. withheld payment. was not the price of installing new plumbing. An omission which is trivial and innocent does not necessarily result in a forfeiture. there was evidence that the pipe actually used was of the same quality. but thereafter delivered pipe from other manufacturers. law has taken a less forgiving approach. Inc. the deviation was so minor as to be considered a convenant and not a condition.S.000 feet of pipe. For example the holding in Bennet: "[W]here a party.'s subcontractor delivered Reading pipe for the first 1. Issue: Is the omission of Reading pipe in the house a cause for forfeiture of the final contract payment? Holding: No. Reasoning: The majority [Cardozo] reasoned that the omission of the pipe was not wilful.'s architect refused to sign off the final certificate. Dissent: The dissent [McLaughlin] stated that the D. whether the other kind was just as good. to require him to rebuild the plumbing. because he might have provided against it by his contract. built a house for the D. and furthermore. It attempts to protect a reliance-type interest of the party who has begun partial performance (as in Fibrosa). notwithstanding any accident by inevitable necessity. There was evidence that the pipe actually used was of the same quality as Reading pipe. the D. The U. (1921) Facts: The P. Kent. The P. could not simply substitute his own judgement for what is stipulated in the contract. creates a duty or charge upon himself. The measure of damages. therefore. v. took possession and noticed that the pipe was not made by Reading. When the building was completed. and that the cost of replacing the entire plumbing with the Reading pipe would have been exorbitant because it would have required rebuilding the house. even if it was 16 . by his own contract. Nature of the Risk: The D. and it would be extremely burdensome on the P. but rather the difference in value between what was actually installed and the Reading pipes. The P. and the P. The P.

and the law would suffer. does not have to prove the difference in value. The dissent concluded that the deviation was not innocent.. The D. There was evidence that the use of the brand name "Reading" was as a generic reference to any high quality wrought iron. Part of this determination involves whether the builder was warned by the contractor of the importance of strict adherence with the specification before it became unduly burdensome to correct the deviation." In Mass. the courts have adopted a quasi. Otherwise. it should be treated as intentional because it was careless. However.'s remedy in a case of substantial performance. parties would be motivated to deviate from contracts intentionally. 4. may have seized upon this event to express other dissatisfactions with the P. Cardozo got around this by stating plainly that his conclusion was that it was either "nominal or nothing. In the instant case. there was an explicit clause in the contract that stated that all work not exactly to spec would be torn down and rebuilt correctly. The absence of the architect's certificate probably is not essential to the outcome of the case because the architect could be acting unreasonably.simply a whim. Under either theory.'s work. Cardozo conceded that the D. 6. but he felt that the deviation was not significant. 3. Notes: 2. Both opinions cited Spence v. 5. However. but only the value of his performance. could have used explicit terms to evidence his desire to have exactly what was called for in the contract. 17 . Cardozo stated that the "cost of replacement" is the general rule for the D. Ham.contract theory to deal with substantial performance cases. the cases come out the same way. so the P. where the court held that the partially performing party had to prove not only the value of what he had done. but that the "difference in value" rule is used when the "cost of replacement" would result in unjust results. clearly had not met the burden of proof as to the difference in value between the actual pipes and the Reading pipes. but also the value of what remained to be done. It may not have been critical to the parties' consideration. and whether it was intentional or unintentional. the P.

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