39 Wis. 2d 540
-Homeowners were dissatisfied with builder’s performance and finished the house on their own.
-In an action to recover monies due, the trial court determined that the builder duly performed all the conditions of the contract with the exception of the defective work and the delay.
-On review, the court determined that the evidence did not sustain the finding in respect to the completion of the home.
-To recover on an uncompleted construction contract on a claim of having substantially, but not fully, performed it, the builder was required to make a good faith effort to perform and substantially perform his agreement, and there was no finding of good faith by the builder.
-The court held that the trial court was in error in granting recovery on the theory of substantial performance, but that the builder had a cause of action to be reimbursed for his services and material on the theory of quantum meruit.
-The home met the conditions of the contract with adjustments made for delay in performance and for minor faulty work.
-It was unjust to allow the homeowners to receive a windfall because of the builder’s breach.
-The court affirmed the judgment on the theory of quantum meruit.
PROCEDURAL HISTORYDefendant homeowners challenged the decision of the County Court of Rock County (Wisconsin), which awarded damages to plaintiff home builder, and entered judgment in favor of the builder on the basis that the builder had substantially performed the contract.
-Where substantial performance has not occurred on a building contract and the non-breaching party accepted the benefit of the rendition of part performance with knowledge of the breach, the contractor may recover in quantum meruit for service rendered.
-Failure to rescind a contract does not make performance substantial which is unsubstantial. -The doctrine of substantial performance is an equitable doctrine and constitutes an exception in building contracts to the general rule requiring complete performance of the contract.
-To recover on an uncompleted construction contract on a claim of having substantially, but not fully, performed it, the contractor must make a good faith effort to perform and substantially perform his agreement.
-Where a defendant justifiably refuses to perform his contract because of the plaintiff’s breach but the plaintiff has rendered part performance which is of a net benefit to the defendant, the plaintiff can get judgment with some exceptions for the amount of such benefit in excess of the harm he has caused the defendant by his breach but in no case exceeding a ratable proportion of the agreed compensation. -Under this rule, the defendant with knowledge of the plaintiff’s breach must assent to the rendition of the part performance or accept the benefit of it.
The true measure of quasi-contractual recovery where the performance is incomplete but readily remedial is the unpaid contract price less the cost of completion and other additional harm to the defendant except that it must never exceed the benefit actually received by the defendant.
-The court affirmed the judgment, but determined that the amount of the judgment found by the lower court was not justified on the theory of substantial performance but was justified on the theory of quantum meruit or restitution.