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ANSWER A TO ESSAY QUESTION 6

I. Carter's liabilities and rights under the Contract

Cart~r's contract with Owens complied with all the formation requirements because it has mutual assent, consideration, and it was in writing, satisfying the Statute of Frauds. So

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the issue here involves the performance of such a contract by Carter. If Carter's contract with Owens had conditions, then Carter's compliance with those conditions will be at issue. Whether Carter's performance is excused is also determinative of his rights and liabilities. Finally, if Carter's performance duty is not excused, then whether his performance was a breach [sic].

A) Time of Esse.nce Clause on Contract

The Contract specifically had a time of the essence clause at the end. Courts will construe these clauses strictly if they are intended by the contracting parties. Since it was expressly stated, th~ courts will not second-guess the •intents of the parties and strictly construe t~is clause.

Sine~ the clause will be ~trictly construed by the courts, then this clause will be viewed as a condition precedent to payrnent. If the party can't fully perform by the prescribed dates, then the condition precedent to payment hasn't been satisfied. As such, Owens need not pay Carter the $8,500 because the. express condition of completing the construction-by April 30 wasn't complied Vl(ith. Sq Owens has a right .to. withhold payment because the condition wasn't satisfied as stated on ,the contract.

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But to render t)'le whole C?Ontract breached just because the time of the essence clause wasn't fully complied with will be too harsh on the breacher. Carter did tender substantial, if not .fuU, p~r,fqrmar;tce by building the-garage.and·the·storage room. (Tiie issues with the shingles and storeroom will be discus~ed separa"te1y ir1 the nt5xt sections.) So.the court may not strictly construe the time of the essence clause as an express condition. Instead, if the

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lfnstrues the condition as a covenant instead, then Carter's failure to finish by April 30 l be fatal.

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Covenants are promises by the parties that they'll abide by them, and failure to do so

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1ult in damages to the aggrieved party. If the time of the essence clause is not an f condition precedent to payment, then Owens' obligations to payment is not excused. lonly be abie to claim dollar damages because Carter didn't comply with the covenant

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lime of the essence clause.

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I ~atching Shingles · fhe express terms of the contract have to be complied with by the parties because that Ithe parties' intent and their duties under the contract, since the contract expressly

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~at the ushingles will be matched to OwensI home. n Failure to do so will be a breach.

l~e is whether the breach is a material one or a minor one.

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~ a minor breach, the aggrieved party. is not excused from full performance of her lso Owen[s] should still pay the contract price to Carter minus the costs of the minor

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r the matching shingles is indeed considered minor. But if the failure to put matching

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onto Owens' garage is a material breach, then the aggrieved party is excused from

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Ire matching of the shingles to the house is probably a minor breach. Whether singles r not does not affect the construction of a garage and a storeroom. This only goes ~thetic issue. It is also subjective whether Owens thinks the shingles match with the I not. So the failure to match is not a material breach since the substantial part of the ,

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1was not to put shingles on but rather to build a garage and a room.

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arter may even argue the singles matched and so there wasn't even a minor breach. 1

rs will counter by saying the contract expressly asked that they match his home and

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since they don:t "precisely'' match, there's a breach. Albeit the discrepancy may be minor, but courts, again, will construe the contract as the intent of the contracting parties.

/ Another way to get around the problem of not getting precisely matching shingles and so having breached in a minor way would be the concept of excuse. Carter may assert he's excused by impracticability because the perfect shingles weren't obtainable with ease. But for impracticability to be a viable excuse, the burden must be so severe for compliance to render the compl1'ance •'mpract•'cable. H th b d 1

ere, e ur en to ook harder for those matching

shingles can't be severe. Although Carter did use better quality shingles, Owen[s] contracted for "matching," not "high quality" shingles. So Carter's assertion of impracticability to excuse his duty to get matching shingles can't prevail.

But Carter can assert that he's mitigated by using almost matching shingles. (Remedies section will discuss mitigation.}

C) Building of a Garage and Storeroom as Specified

Once ag~in, the contract expressly'stated duties and term for Carter to perform and abide by • So Carter's failure to comply will be a breach.

These breaches haxe a stronger-argument to be material ones because the contract's essence is to build a garage "and $torerobm in a specified dimension. Since the contract expressly require,d Carter to build them in a certain size, the intent of Owen[s] was clear. So Carter's failure to perform as instructed will be a material breach because the dimensions of

the garage and storeroom didn't follow the contract as stated.

As such, Owen[s] can be, excused from performing because it's a material breach. However, if it's a minor breach, then the court will still require Owen[s] to pay Carter.

The failure to comply with the exact 'dimensions could be viewed as a minor breach ' because the garage and !;t9rerpom were completely built as directed with the design,

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, and overall dimensions roughly. The deviation from the dimensions are 2 inches Since normal cars would fit, the purpose of the contract because Carter still built a garage usable by cars. It's just that Owen(s] has that don't fit without the extra 2 inches. However, Owens didn't this to Carter, so Carter's failure to take heed in ensuring the dimensions are at 4' and 30' by 25' couldn't be Carter's fault. Therefore, Carter's failure to follow ns could possibly be viewed as a minor breach. Then he'll still be entitled to

ANSWER 8 TO ESSAY QUESTION 6

Owens (0) and Carter (C) entered into a valid construction contract, to whic.~h the

common law of contracts applies. The determination of C's rights and liabilities depend~ upon

an analysis of his performance of the terms of the contract and any breach thereof.

At common law, the duty to perform may be discharged by exact performance ~>f the terms of the contract. A performance which does not conform to the terms of the contract does not discharge the duty and is a breach of the contract. A breach may either be rninor or material. A material breach is one that so substantially affects the value of the contra1~t (or '• the benefit of the bargain) that the duty to pay the contract price is discharged, while a f'(linor breach occurs when substantial performance has been rendered. In the event of a material

breach, the breaching party may not recover under the contract but may recover any benefit bestowed under quasi-contract (or quantum meruit) principles. For minor breaches, the breaching party may receive the contract price, less the amount by which the defe(;:tive

performance reduced the bargained-for benefit.

1. Breach of the "'time is of the essence" clause

A "time is of the essence" clause serves to notify the parties that a failure to render

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performance by the specified date is a breach of a contractual term and may entitle the promisee to damages.

Here, C breached the time is of th~ essence clause, beca\,Jse he finished performa11ce ten days late. There is no showing that this caused 0 any actual damages and so O's· rem~dy would be limited to nominal damages. Carter's liability for this {minor) breach is negligible.

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2. Failure to use matching shingles

C has an argument that he did not breach the relevant term at all. It is unclear from the contract whether the term ''matched" means: a) the siding, paint and roof on the garage shall be constructed from precisely the same materials as the corresponding pieces on the house; or b) the siding, paint and roof shall be of reasonably similar materials so that, as a totality, the house and garage match (to a reasonable person or even to O's satisfaction). If customarily in construction contracts it means the latter, C will prevail, in the absence of contrary evidence of the parties' intentions. 0 could have (but did not) specifically bargain for exactly matching shingles. (It might have been wise to ask or notify 0 about the non-match earlier, though.)

Assuming that C loses the above argument on interpretation, he has failed to perform exactly and thus has breached. This breach does not go to the value of the bargained-for consideration -the roof is otherwise a perfectly good roof (and may be superior to the one bargained for!). 0 will not be able to obtain the cost of removal and replacement, but will only recover the difference in value, if any. Again, C may be liable only for nominal damages.

3. Failure to build the dividing wall

C's failure to put the wall in the right place is a more serious issue, because that failure does go to the suitability of the garage forO's intended use (i.e., to the value of the bargained.for benefit). However, the cost of c.orrecting this problem is less than 10% of the total contract price. This is likely to be considered a minor breach as well, wit~ damages of $800.

C may file suit against 0 for $7,800; i.e., the contract price of $8,500 less the $800 to relocate the 9ividing wall. Unfortunately, the time of ~ssence clause has the effect of

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cutting off the time of performance allotted to C, so C cannot correct his mistake and sue for the entire contract price.