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Clark v. Marsiglia

Court for the Trial of Impeachments and Correction of Errors
1 Denio 317 (1845)
ELI5:

Rule of Law:

A non-breaching party in a contract for services has a duty to mitigate damages after the other party repudiates the contract. The non-breaching party cannot continue to perform work after being instructed to stop and thereby increase the damages recoverable from the breaching party.


Facts:

  • Marsiglia delivered paintings to Clark for cleaning and repair pursuant to a contract.
  • Before the work was finished, Marsiglia instructed Clark to stop all work on the paintings.
  • Despite this instruction, Clark continued to work on and complete the cleaning and repair of the paintings.
  • Clark then sought payment from Marsiglia for the full value of the completed work.

Procedural Posture:

  • Clark (plaintiff) sued Marsiglia (defendant) in a New York trial court for breach of contract.
  • The trial court ruled in favor of Clark, allowing him to recover the full contract price as if the order had not been countermanded.
  • Marsiglia, the defendant below, appealed the trial court's judgment to the Supreme Court of Judicature of New York.

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Issue:

Does a party hired to perform a service have the right to complete the work and recover the full contract price after the employer has repudiated the contract and instructed the party to stop?


Opinions:

Majority - Per Curiam

No. A party hired to perform a service does not have the right to complete the work and recover the full contract price after the employer has repudiated the contract. While the defendant's countermand of the order was a breach of contract, the plaintiff had no right to 'obstinately persist' in the work to make the penalty upon the defendant greater. The court reasoned that allowing a party to continue performance after repudiation would lead to injustice and economic waste, such as forcing someone to pay for a house they no longer need or can afford. The proper remedy for the non-breaching party is to be fully compensated for the part performed and indemnified for any loss in respect to the part left unexecuted.



Analysis:

This case is a foundational decision establishing the duty to mitigate damages in American contract law. It stands for the principle that a non-breaching party cannot recover for losses that could have been reasonably avoided after the breach occurred. This doctrine promotes economic efficiency by preventing the waste of resources on unwanted performance and limits the breaching party's liability to the damages caused at the time of repudiation, plus any lost profits from the unperformed portion of the contract.

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