K & G Constr. Co. v. Harris
223 Md. 305
Facts:
Subcontractor appellees damaged a wall in the course of their performance of a subcontract, and appellant contractor withheld partial payment as damages. The lower court awarded damages to appellees and the reviewing court reversed, holding that the failure of appellee’s performance to constitute substantial performance could justify the appellant in refusing to make a progress payment. If the refusal to pay an installment was justified on the appellant’s part, the appellee was not justified in abandoning work by reason of that refusal. His abandonment of the work would render him liable to the appellant for his increased cost since the further breach would itself be a wrongful repudiation that went to the essence, even if the defects in performance did not.
Procedural History:
Appeal from a decision of the Circuit Court for Prince George’s County (Maryland) awarding appellee subcontractor damages after appellant subcontractor withheld an installment payment due to appellee after appellee’s failure to perform a portion of his work in a workmanlike manner.
Rule:
where there is a breach of a mutually dependent clause, the non-breaching party may suspend his performance, and the breaching party remains under a duty to continue to perform.
Promises are mutually dependent if the parties intend performance by one to be conditioned upon performance by the other, and, if they be mutually dependent, they may be (a) precedent, i.e., a promise that is to be performed before a corresponding promise on the part of the adversary party is to be performed, (b) subsequent, i.e., a corresponding promise that is not to be performed until the other party to the contract has performed a precedent covenant, or (c) concurrent, i.e., promises that are to be performed at the same time by each of the parties, who are respectively bound to perform each.
Analysis:
Promises and counter-promises made by the respective parties to a contract have are (1) independent of each other, or (2) mutually dependent, one upon the other. They are independent of each other if the parties intend that performance by each of them is in no way conditioned upon performance by the other. In other words, the parties exchange promises for promises, not the performance of promises for the performance of promises. A failure to perform an independent promise does not excuse non-performance on the part of the adversary party, but each is required to perform his promise, and, if one does not perform, he is liable to the adversary party for such non-performance.
Promises are mutually dependent if the parties intend performance by one to be conditioned upon performance by the other, and, if they be mutually dependent, they may be (a) precedent, i.e., a promise that is to be performed before a corresponding promise on the part of the adversary party is to be performed, (b) subsequent, i.e., a corresponding promise that is not to be performed until the other party to the contract has performed a precedent covenant, or (c) concurrent, i.e., promises that are to be performed at the same time by each of the parties, who are respectively bound to perform each.
There are three classes of independent promises: (1) those in which the acts to be performed by the respective parties are, by the terms of the contract, to be performed at fixed times or on the happening of certain events which do not bear any relation to one another; (2) those in which the covenant in question is independent because it does not form the entire consideration for the covenants on the part of the adversary party, and ordinarily forms but a minor part of such consideration; and (3) those in which the contract shows that the parties intended performance of their respective promises without regard to performance on the part of the adversary, thus relying upon the promises and not the performances.
While the courts assume, in deciding the relation of one or more promises in a contract to one or more counter-promises, that the promises are dependent rather than independent, the intention of the parties, as shown by the entire contract as construed in the light of the circumstances of the case, the nature of the contract, the relation of the parties thereto, and the other evidence which is admissible to assist the court in determining the intention of the parties, is the controlling factor in deciding whether the promises and counter-promises are dependent or independent
Outcome:
Judgment reversed and entered in favor of appellant because appellee’s abandonment of the work was a breach that would render him liable to appellant for damages even if the original defects in performance did not.
223 Md. 305
Facts:
Subcontractor appellees damaged a wall in the course of their performance of a subcontract, and appellant contractor withheld partial payment as damages. The lower court awarded damages to appellees and the reviewing court reversed, holding that the failure of appellee’s performance to constitute substantial performance could justify the appellant in refusing to make a progress payment. If the refusal to pay an installment was justified on the appellant’s part, the appellee was not justified in abandoning work by reason of that refusal. His abandonment of the work would render him liable to the appellant for his increased cost since the further breach would itself be a wrongful repudiation that went to the essence, even if the defects in performance did not.
Procedural History:
Appeal from a decision of the Circuit Court for Prince George’s County (Maryland) awarding appellee subcontractor damages after appellant subcontractor withheld an installment payment due to appellee after appellee’s failure to perform a portion of his work in a workmanlike manner.
Rule:
where there is a breach of a mutually dependent clause, the non-breaching party may suspend his performance, and the breaching party remains under a duty to continue to perform.
Promises are mutually dependent if the parties intend performance by one to be conditioned upon performance by the other, and, if they be mutually dependent, they may be (a) precedent, i.e., a promise that is to be performed before a corresponding promise on the part of the adversary party is to be performed, (b) subsequent, i.e., a corresponding promise that is not to be performed until the other party to the contract has performed a precedent covenant, or (c) concurrent, i.e., promises that are to be performed at the same time by each of the parties, who are respectively bound to perform each.
Analysis:
Promises and counter-promises made by the respective parties to a contract have are (1) independent of each other, or (2) mutually dependent, one upon the other. They are independent of each other if the parties intend that performance by each of them is in no way conditioned upon performance by the other. In other words, the parties exchange promises for promises, not the performance of promises for the performance of promises. A failure to perform an independent promise does not excuse non-performance on the part of the adversary party, but each is required to perform his promise, and, if one does not perform, he is liable to the adversary party for such non-performance.
Promises are mutually dependent if the parties intend performance by one to be conditioned upon performance by the other, and, if they be mutually dependent, they may be (a) precedent, i.e., a promise that is to be performed before a corresponding promise on the part of the adversary party is to be performed, (b) subsequent, i.e., a corresponding promise that is not to be performed until the other party to the contract has performed a precedent covenant, or (c) concurrent, i.e., promises that are to be performed at the same time by each of the parties, who are respectively bound to perform each.
There are three classes of independent promises: (1) those in which the acts to be performed by the respective parties are, by the terms of the contract, to be performed at fixed times or on the happening of certain events which do not bear any relation to one another; (2) those in which the covenant in question is independent because it does not form the entire consideration for the covenants on the part of the adversary party, and ordinarily forms but a minor part of such consideration; and (3) those in which the contract shows that the parties intended performance of their respective promises without regard to performance on the part of the adversary, thus relying upon the promises and not the performances.
While the courts assume, in deciding the relation of one or more promises in a contract to one or more counter-promises, that the promises are dependent rather than independent, the intention of the parties, as shown by the entire contract as construed in the light of the circumstances of the case, the nature of the contract, the relation of the parties thereto, and the other evidence which is admissible to assist the court in determining the intention of the parties, is the controlling factor in deciding whether the promises and counter-promises are dependent or independent
Outcome:
Judgment reversed and entered in favor of appellant because appellee’s abandonment of the work was a breach that would render him liable to appellant for damages even if the original defects in performance did not.
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