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


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.


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


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


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.


(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."