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Construction agreements express an intent that payment be conditioned and dependent upon completion of all the agreed work.
Plaintiff entered into a written agreement with defendants, to make extensive alterations to defendants' home, the reference therein to price and payment being as follows:
"All above material, and labor to erect and install same to be supplied for $3,075.00 to be paid as follows:
$ 150.00 on signing of contract,
$1,000.00 upon delivery of materials and starting of work,
$1,500.00 on completion of rough carpentry and rough plumbing,
$ 425.00 upon job being completed."
The work was commenced and partly finished, and the first two stipulated payments were made. Then, when the "rough work" was done, plaintiff asked for the third installment of $1,500 but defendants would not pay it, so plaintiff stopped work and brought suit for the whole of the balance, that is, for the two last payments of $1,500 and $425. On the trial plaintiff stipulated to reduce its demand to $1,500, its theory being that, since all the necessary "rough carpentry and rough plumbing" had been done, the time had arrived for it to collect $1,500. It offered no other proof as to its damages. Defendants conceded their default but argued at the trial, and argue here, that plaintiff was entitled not to the $1,500 third payment, but to such amount as it could establish by way of actual loss sustained from defendants' breach. In other words, defendants say the correct measure of damage was the value of the work actually done, less payments made, plus lost profits. The jury, however, by its verdict gave plaintiff its $1,500. The Appellate Division, Second Department, affirmed the judgment. Defendants appealed.
Did the language of the written agreement quoted above make it an entire contract, with one consideration for the doing of the whole work, and payments on account at fixed points in the progress of the job?
The court held that the total price was the single consideration for the whole of the work and that separately listed payments in the contract were not allocated absolutely to certain parts of the undertaking but were scheduled part payments, mutually convenient to the builder and the homeowners. The contract did not state that separate items of work would be done for separate amounts of money but that the whole alteration project, including material and labor, was to be supplied for the price. Nothing in the record suggested that the parties had intended to group several separate engagements, each with its own separate consideration. The builder, on the homeowner's default, could collect either in quantum meruit for what had been finished or in contract for the value of what the builder had lost -- that is, the contract price, less payments made and less the cost of completion.