Substantial Performance in Construction Contracts

The assignment is about determining whether Cheetum & Chancer Construction Corp. (C&CC) can successfully sue Ted and Alice for breach of contract based on the doctrine of substantial performance, despite the numerous defects and omissions in the construction project. The case requires legal research to find a binding precedent in Riverhead, New York that is factually similar to the described situation.

Name___________________
MANDATORY LEGAL RESEARCH ASSIGNMENT
CONTRACT LAW – IN CONSTRUCTION CONTRACTS, WHAT
CONSTITUTES SUBSTANTIAL PERFORMANCE?
Directions: Answer all questions below. Perform whatever legal research is necessary
to find the answer. Follow all instructions. Type or print neatly. This assignment may
be done individually. Successfully completing this assignment will result in the addition
of TWO POINTS to your overall numerical average. Answers must be consistent with
the case that you find; no credit will be given for answers that are inconsistent with the
case. Follow all directions carefully.
Due Date: DECEMBER 4, 2016, IN CLASS. Hardcopies Only – No E-mails. All
papers for this assignment are to be stapled together as one document. You must
obtain your case using Westlaw.
BACKGROUND
Ted and Alice contract with Cheetum & Chancer Construction Corp. to have C&C build
a house for them in Riverhead, New York. The house is to be a luxury prefabricated
home and the total cost is to be $800,000. According to C&C, the house has been
completed in timely fashion and the last draw of $200,000 is now due.
Before paying the last draw, Ted and Alice move in and discover a number of defects and
deviations from the original architectural drawings. There are cracks in the foundation
and the basement shows signs of moisture seeping in through the walls. A sliding glass
door leading to a sun room is sticking and is difficult to open. The sun room was
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supposed to have a poured concrete foundation but instead it sits on pylons, a cheaper
method of construction. One of the two fireplaces belches smoke into the room. The
closet in one of the bedrooms was mistakenly installed under the attic staircase so it has
an angled ceiling that makes it useless for hanging clothes. The kitchen cabinets are
made of particle board instead of the solid cherry called for in the plans. The bedroom
floors are not level and the upstairs bathroom floor is linoleum instead of the marble that
was called for in the plans. The plumbing works, but the fixtures are cheap substitutes
for the ones called for in the specs, and they have a cheap feel to them. In addition, a
lower grade of pipe was used, as opposed to the grade that was specified in the plans.
The numerous defects and omissions described above appear to be the result of
incompetence. C&C apparently tried in good faith to complete the contract, and the
house is livable – C&C did obtain a Certificate of Occupancy from the Town. It is
estimated that it will cost $100,000 to bring the house into compliance with the original
architectural drawings. Ted and Alice are irate and refuse to pay C&C the final draw of
$200,000.
QUESTIONS TO BE ANSWERED
1. Under New York law, can C&C be a plaintiff and successfully sue Ted and Alice
for breach of contract based on the doctrine of substantial performance, even
though C&C committed the errors and omissions described above? Find, cite and
attach(!!!) a case that answers this question. The case should be factually similar
to the case described above and should be binding precedent in Riverhead, New
York. Highlight(!!!) the facts in the case that you think are dispositive, and
highlight(!!!) the rule. Also, in the space below, QUOTE the rule on this issue.
_____ Yes, C&C probably can successfully sue for breach of contract under the
doctrine of substantial performance and if successful it will win
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a) $200,000
b) $200,000 less the cost to cure the defects and omissions
c) $200,000 plus attorney’s fees and costs
_____ No, C&C probably will not be able to successfully sue for breach of
contract because under the facts and law, the defects would constitute a
material breach.
Rule (QUOTE!):
The plaintiff had performed substantially according to the conditions and the terms of the
contract. Read more at Childres, R., 1970. Conditions in the Law of Contracts. NYUL
Rev., 45,
Citation of case: Childres, R., 1970
_____ 2. What is the legal standard that the Court uses to determine whether a
contractor has substantially performed a construction contract? In the space below,
QUOTE the STANDARD and the FACTORS that the Court considers in determining
whether a contractor has substantially performed.
STANDARD for determining whether a contractor has substantially performed [ONE
SENTENCE – QUOTE!!!]:
“The standard of obligations of the substantial performance and the reasonable
expectation and the faith.”
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FACTORS for determining whether a contractor has substantially performed [4 - 5
SENTENCES]:
 Extent of the deviation of substantial along with its remedies.
 The likelihood and the extent of the breach cure.
 Identify if the contractor has performed as per the obligations or not.
 The extent to which the injured party would be deprived of the benefits.
 Identify if the contractor has reacted according to the faith and belief or
there is an existence of willful breach.
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