Pinches v. Swedish Evangelical Lutheran Church
55 Conn. 183, 10 A. 264, 1887 Conn. LEXIS 26 (1887)
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Rule of Law:
Where a contractor substantially performs a building contract in good faith but with defects that cannot be remedied without unreasonable economic waste, the measure of damages is the difference in value between the building as constructed and the building as specified in the contract, not the cost of correction.
Facts:
- Pinches entered into a written contract with the Swedish Evangelical Lutheran Church to construct a church edifice according to specific plans.
- Pinches completed the building, and the Church took full possession and began using it on January 21, 1885.
- The completed building deviated from the contract specifications in several material ways: the ceiling was two feet lower, and the windows and seats were smaller than required.
- The deviation in ceiling height was due to a combined error of Pinches and the Church's architect, while other deviations were due to the inadvertence of Pinches and his workers.
- Pinches acted in good faith throughout the project.
- The Church objected to the changes as soon as they were discovered.
- The building as completed is reasonably adapted for the Church's use and is beneficial to them.
- Conforming the building to the contract specifications would be practically impossible without partially demolishing and rebuilding the structure.
Procedural Posture:
- Pinches (plaintiff) sued the Swedish Evangelical Lutheran Church (defendants) in a trial court to recover payment for labor and materials.
- At trial, the defendants offered evidence to prove the amount it would cost to make the building conform to the contract.
- The trial court excluded the defendants' evidence regarding the cost of completion.
- The trial court ruled in favor of the plaintiff, awarding the contract price minus the diminution in the building's value due to the deviations.
- The defendants appealed the trial court's decision to exclude their evidence to the state's highest court.
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Issue:
In a construction contract where the builder has substantially performed in good faith but with defects that cannot be remedied without substantial demolition and expense, is the proper measure of the owner's damages the cost to bring the building into conformity with the contract?
Opinions:
Majority - Beardsley, J.
No. The proper measure of damages is not the cost to conform the building to the contract where doing so would be economically wasteful. The traditional, harsh rule preventing any recovery unless a contract is perfectly performed is inequitable, as it allows the owner to be unjustly enriched by retaining the benefit of the contractor's labor. The modern, and better, rule allows a contractor who has acted in good faith and substantially performed to recover the contract price less the damages caused by the deviation. Where defects can be remedied at a reasonable expense, the damages are the cost of completion. However, where, as here, remedying the defects would require an expenditure so large it would deprive the contractor of any compensation, and the owner is in beneficial use of the building, the proper measure of damages is the diminution in the value of the building caused by the deviation from the contract.
Analysis:
This case is a foundational decision in contract law establishing the doctrine of substantial performance and its corresponding remedy. It formally distinguishes between two measures of damages for breach of a construction contract: 'cost of completion' versus 'diminution in value.' The ruling establishes the principle of 'economic waste' as the key factor in determining which measure to apply, preventing a non-breaching party from insisting on a remedy that is grossly out of proportion to the actual harm suffered. This precedent provides a more flexible and equitable framework for resolving construction disputes where perfect performance is not achieved, shaping modern contract remedies by prioritizing fairness and avoiding punitive outcomes for unintentional breaches.
