Supreme Court of
Issue: Was the plaintiff entitled to (1) the reasonable cost of doing the work the defendant was supposed to perform under the contract or (2) the difference between the value of the land as it was originally and the value of the land as it would have been had the defendant performed?
Rule: The proper measure of damages is the cost of remedying the defect.
Analysis: The majority asserts that the contract in this case should be looked at like a construction contract where the end product is the “uniform grade”. The court says that by analogy, the injury is the loss of a “physical structure” that was called for in the contract, and even if the land is worth less than the cost of fixing the “structure”, the proper award of damages is the cost of setting things straight.
The dissenting opinion claims that this award would put the plaintiff in a better position by far than performance would have done. Had the contract been performed, it is argued, the plaintiff would have basically $12,000 in his pocket, whereas the damages suggested by the majority would give the plaintiff five times that much. This opinion suggests that the majority errs in applying tort principles of punishment on what they consider to be a culpable contract breaker rather than the appropriate “Golden Rule” standard, namely that the injured party needs to be put in the position performance would have done.
Conclusion: The judgment was reversed and a new trial was ordered.
The defendant settled the case for $55,000.