Question

Read the following hypothetical and prepare a 500 word minimum written response to the questions. Your response must include the relevant legal principles that are the basis for your answer:

I do not have the information of the agreement terms

Hillman Brothers Construction, Inc. agreed to build a home for Maggie Sykes. The total contract price for the home is $325,000. The home is complete in all respects except for the fact that shutters have not been installed on the windows. The contract between the parties stipulated that Hillman Brothers would install shutters on each window.
The day before the “closing” on the home’s purchase, Maggie noticed that Hillman Brothers had not installed the shutters. She then called the owner, president and chief executive officer of the company, Andrew Hillman, and a heated argument between the two ensued (Maggie is well-known for her “anger management” issues, and she becomes especially angry when her requests as a buyer are not met.) The conversation ended with Andrew proclaiming that “Hades would freeze over” before he had his construction crew install the shutters, and with Maggie asserting that the “deal is off.” Hillman Brothers expects to be paid the full contract price, $325,000, for the home, based on the fact that “irreconcilable differences” between the parties make it impossible for the company to install the shutters, and since Maggie’s incorrigible personality caused the impassible chasm between them. For total “parts and labor,” it would cost $5,750 to install the shutters.
Is Maggie Sykes obligated to purchase the house? If so, is she obligated to pay the full contract price of $325,000? Is Hillman Brothers Construction, Inc. required to install the shutters?

Answer 1

In order to understand the Hamilton Brothers and Maggie Sykes, it is important to comprehend the terms and conditions of the contract, the type of breach and the legal and equitable remedies available to the plaintiff.

The circumstances that result in Discharge of Contract are :-

1. Performance
2. Occurrence and Non Occurrence of an event
3. Material breach by one or both the parties
4. Mutual Agreement
5. Operation of Law

                                            Some points to reflect on

Performance : The performance could be either complete or substantial. A contract is said to be substantially performed if ‘nearly all’ of the terms and conditions are fulfilled without any willful departure from the terms of agreement.

Material Breach : Material breach of contract occurs when one of the parties to the contract unjustifiably fails to substantially perform the contractual obligation.

Anticipatory Repudiation : It occurs when a party to contract decides to not perform the contract fully owing to the expected loss to the party due to changed market conditions. Such repudiation may be expressly stated or implied. It discharges the other performing party of all the obligations to the contact and it can then immediately sue the defaulting party for the breach of contract.

Legal remedies or monetary damages available for the plaintiff on breach of contract ;

Compensatory damages : The damages payable to the plaintiff that put the plaintiff in a position in which he would have been had the contract been fully performed.

Consequential Damages : These arise to the plaintiff when a special fact or circumstance arises outside the contract.

Punitive Damages : These are meant to deter the defendant from engaging in a similar behavior in future.

Nominal Damages : They are very small in amount but are imposed on the defendant just to signify that though no monetary loss occurred to the plaintiff but he was wronged due to the breach.

Liquidated Damages : They are pre specified on the contract between the parties itself at the time of inception.

Equitable damages available for the plaintiff on breach of contract ;

Rescission : Termination of contract.

Restitution : Return of any property transferred under the contract.

Specific performance : The breaching party is ordered to perform the unfulfilled part of the contract.

Injunction : An order refraining the defendant from acting on something.

Reformation : Rewriting of the contract

Quasi Contract : A contract like imposition on the defendant to prevent any ‘undue enrichment’

Facts of the case

• The contract expressly provided that Hamilton Brothers would install shutters on each window.
• Hamilton Brothers performed the contract substantially (as the ‘parts and labor’ would cost just $5,750 to install the shutters in a total project of $ 325,000.)
• However, Hamilton Brothers have committed Anticipatory Repudiation to the extent of not installing shutters on the windows.

Conclusion

• Maggie Sykes can file a legal suit for Anticipatory Repudiation. Its not a case of Material Breach.
• The court, after having regard to the terms of contract and gravity of loss suffered by the plaintiff, may impose compensatory damages on Hamilton Brothers as it deems fit and/or order specific performance (i.e., ask Hamilton Brothers to install shutters on the windows).