J.O. Hooker & Sons v. Roberts Cabinet Co.

Supreme Court of Mississippi · 1996 · Contracts

Contractssubcontractgeneral contractorincorporation by referenceplans and specsmaterial breachrescissionsummary judgment

Facts

Hooker was the general contractor on a housing renovation project and entered into a subcontract with Roberts to furnish and install new cabinets, with the price including tearing out old cabinets and installing new ones. The subcontract stated the work would be done "as per plans and specs," but it did not expressly state that Roberts had to dispose of the removed cabinets, while Hooker's general contract with the owner imposed specific duties concerning cabinet removal and disposition. When Roberts later refused to assume those disposal duties and after earlier demanding additional money because it had underestimated the job, Hooker faxed Roberts that he considered the contract null and void. Roberts had already begun performance and sued for breach.

Issue

Did the trial court properly grant summary judgment to Roberts on liability where Hooker claimed there was a factual dispute over whether the subcontract required Roberts to dispose of removed cabinets? If so, were the jury's damages sustainable, or should they be reduced by remittitur?

Rule

In a mixed goods-services construction subcontract, whether Article 2 of the UCC applies depends on the nature of the contract and whether the dispute primarily concerns goods or services; where the dispute concerns delegated service duties, general contract law applies. Under general contract law, extrinsic evidence cannot supplement an unambiguous subcontract, and a reference to plans and specifications does not, without clearer language, impose additional expensive duties not set out in the subcontract. A contract may be unilaterally terminated only for a material breach, meaning a failure to perform a substantial part or essential term, or a breach that substantially defeats the contract's purpose or was regarded by the parties as vital.

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

Lakeview Builders, a general contractor in Columbus, Ohio, hired Mason Millwork to furnish and install custom reception desks in a municipal office renovation. After a dispute arose over which party had to remove and haul away the old built-in counters, Lakeview argued that Article 2 governed because the subcontract involved the sale of desks.

Which is the best analysis of the governing law?

Explanation. The majority held that in a mixed transaction involving goods and services, the governing law depends on the nature of the contract and, importantly, whether the dispute primarily concerns goods furnished or services rendered. Where the controversy is over who must perform removal or disposal duties, ordinary contract law applies rather than Article 2. That is so even if the contract also includes the furnishing of custom goods.