Glazer v. Schwartz

Supreme Judicial Court of Massachusetts · Contracts

ContractsConstruction contractsMechanic's liensSubstantial performanceQuantum meruitDamageswilful breachintentional default

Facts

The plaintiff agreed to build a dwelling house and garage for the defendant for $14,700, and the defendant had paid $13,000. The master found multiple departures from the specifications, including omission of weather strips, improper grading, use of improper hardware and doors, a serious ceiling crack caused by poor workmanship, and most importantly the failure to install the specified Cabot quilt insulation on all outside walls. Instead, after using the Cabot quilt on a little more than half the house, the plaintiff voluntarily substituted two layers of tar paper because he had difficulty handling the specified material. The plaintiff's bill was based only on the contract, while the defendant sought damages by answer in the nature of a cross bill.

Issue

Whether a builder who intentionally failed to comply with substantial specifications of a construction contract may enforce a mechanic's lien or recover on the contract or quantum meruit, and if not, what measure of damages the owner may recover on a cross claim. The case also asked whether the owner could obtain affirmative relief in this equity proceeding.

Rule

To recover on a construction contract, the plaintiff must prove complete performance; substantial performance and good faith alone are not enough to recover on the contract. A builder who in good faith substantially performs may recover on a quantum meruit measured by the contract price less the diminution in value from exact performance, but where the default is wilful there can be no recovery either on the contract or on a quantum meruit. In the case of a wilful and intentional failure to build as agreed, the owner may recover the reasonable cost of making the structure conform in a reasonable way to the contract, unless the owner's conduct would make that recovery inequitable.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Portland, Maine, Nora Benton hired Lakeview Custom Builders, LLC to renovate her townhouse under a written contract requiring walnut interior doors, copper flashing, and a slate entry floor. The contractor finished most of the work but installed oak doors instead of walnut, omitted some flashing, and used ceramic tile in the entryway. The contractor insists it acted honestly and substantially performed.

If the contractor sues only for the unpaid contract balance, what is the best result?

Explanation. The majority stated that to recover on the contract, the plaintiff must prove complete performance. Good faith and substantial performance are not enough for recovery on the contract itself. Even if the builder acted honestly, a suit based only on the contract fails without complete performance. (Derived from Glazer v. Schwartz (n.d.).)