American Standard v. Schectman

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American Standard v. Schectman
Court Appellate Division of New York
Citation 439 N.Y.S.2d 529
80 A.D.2d 318
Date decided May 15, 1981

Facts

For 26 years, American Standard, Inc. ("Standard") operated a pig iron manufacturing plant near Niagara Falls, New York. However, in 1972, Standard closed its plant & hired Mr. Schectman who was a demolition & excavation contractor.

In accordance with the contract, Standard paid Schectman $275,000 to (1) remove equipment, (2) demolish structures, and (3) grade the land.

Schectman cut corners: he left the plant ungraded because grading would have cost him $90,000.

Procedural History

Standard sued Schectman in the Erie Supreme Court for breach of contract. Schectman lost.

Issues

Can an injured party recover damages for the cost of completion of a construction contract?

Arguments

Schectman argued that Standard didn't suffer any damages. Schectman offered proof that Standard sold the land for $180,000.

Holding

Yes. A party can recover damages for the cost of completion of a construction contract if the breaching party fails to substantially perform the contract in good faith.

Rule

(Damages for incomplete performance) = (Diminution in Value)

Quimbee: "In the context of a construction contract, diminution-in-value damages are measured by the difference between the value of a structure with a defect & the value of the structure absent the breach."

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