Tag Archives: betterment

ANTICIPATORY REPUDIATION OF A CONTRACT — THE PROSPECTIVE BREACH

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There are instances where a party can engage in the anticipatory repudiation of their obligations under a contract.  In essence, this is basically a party prospectively breaching the contract by repudiating their obligations in the contract.

A prospective breach of contract occurs where there is absolute repudiation by one of the parties prior to the time when his performance is due under the terms of the contract.  Such a repudiation may be evidenced by words or voluntary acts but the refusal must be distinct, unequivocal, and absolute. Moreover, repudiation can be shown where one party makes additional demands not included in the initial agreement:

            The law is clear that where one party to the contract arbitrarily demands performance not required by the contract and couples this demand with a refusal to further perform unless the demand is met, the party has anticipatorily repudiated the contract, which anticipatory repudiation relieves the non-breaching party of its duty to further perform and creates in it an immediate cause of action for breach of contract.

24 Hr Air Service, Inc. v. Hosanna Community Baptist Church, Inc., 46 Fla. L. Weekly, D1344a (Fla. 3d DCA 2021) (quotations and citations omitted).

In 24 Hr Air Service, an air conditioning contractor agreed to perform repairs to a Church’s air conditioning unit.  However, when the contractor went into the attic to start the repairs, the wooden platform in the attic was unstable and a portion of the ceiling collapsed.  The Church repaired the ceiling.  However, the contractor refused to return to complete its repairs citing safety reasons.  The contractor requested proof the repairs to the ceiling were made before it returned to complete its contracted work and such proof was never provided.

Did the contractor’s refusal to complete its work amount to anticipatory repudiation of its contract by imposing the additional demand of proof of repairs to the ceiling before completing its contracted work?  Both the trial and appellate court believed so.

The Contractor’s request that the Church provide safety assurances of the ceiling repairs constitutes an additional demand that was not agreed to by the parties under the service contract.  Despite the Contractor’s argument that it never abandoned the job, its demand for safety assurances coupled with its refusal to complete the agreed repairs until such assurances were provided was an anticipatory breach of the contract. 

24 Hr Air Service, Inc., supra.

Based on the anticipatory repudiation or breach of the contract, what were the Church’s damages?

The proper measure of damages “would be either the reasonable cost of completion, or the difference between the value the repair would have had if completed and the value of the repair that has been thus far performed.”  24 Hr Air Service, Inc., supra (quotation and citation omitted).  This is referred to as benefit-of-the bargain damages, with the objective to place the damaged party in the position “he would have been in had the contract been completely performed.”  Id.    The party, however, cannot seek what is known as “betterment” or a better deal than what it originally bargained for—a party “can neither receive more than [it] bargained for nor be put in a better position than [it] would have been had the contract been performed.”  Id.

If you are dealing with a breach of contract, or even a prospective breach / anticipatory repudiation of an existing contract, it is advisable to seek legal counsel to assist you in preserving your arguments, the proper measure of damages for the breach, and any potential betterment associated with your damages.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

THE DEFENSE OF BETTERMENT IN CONSTRUCTION DEFECT DISPUTES

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There is an affirmative defense referred to as betterment in construction defect cases.  This is a defense raised to challenge the amount of damages incurred by the plaintiff when the plaintiff performs repairs BETTER than the original design / contract documents.  See Grossman v. Sea Towers, Ltd., 513 So.2d 686, 688 (Fla. 3d DCA 1987) (“It is significant on this point that neither the architectural specifications nor the structural design was deficient for the original intended purpose. The proper measure of damages, therefore, should have been the amount necessary to restore the deck to its original condition….”).

 

Say the contract documents called for cpvc water piping and as a result of an installation failure, the cpvc piping was replaced with copper piping.  A claim was asserted against the plumber for the costs incurred to replace cpvc piping with the copper piping.  But, the contract documents only called for cpvc piping which was an acceptable design requirement.  So that fact that this piping was replaced with copper piping constitutes betterment or a repair better than the contract documents.  The plumber should not be responsible for this betterment as it would give the plaintiff (such as an owner) a windfall since it is getting a repair better than what it originally bargained for in the contract documents.  Rather, the damages should be to restore the cpvc piping to its original planned condition.

 

The theory is the repairs are not intended to constitute a windfall to the plaintiff with repairs better than what the contract documents called for.  The defendant is only required to perform work pursuant to the contract documents because that is what it was paid to perform.  It was not paid to perform work that exceeds the contract documents; thus, costs of repair work that exceeds the contract documents are “unreasonable” and should constitute betterment.  The magic word is “unreasonable”  as the plaintiff will and should establish in its case-in-chief that the repairs it performed were reasonable and cost effective in light of the given defect or failure.

For example, in Arch of Illinois, Inc. v. S.K. George Painting Contractors, Inc., 288 Ill.App.3d 1080 (Ill. 5th DCA 1997), a factory owner sued a painting contractor for defective painting. The painter was only to apply one coat of primer and one coat of enamel for a contract price of $59,000.   After completion, the paint started to peel.  The owner put on evidence that the bids to repair the work were between $120,000 to $248,000 to sandblast the peeling paint, prime the surface, and repaint the factory.   The painter argued betterment.  The appellate court, however, applied this logic: “If a paint job is substantially or completely defective and peeling, then completely undoing the faulty work so that the structure can be repainted does not amount to unreasonable destruction of the contractor’s work.” Arch of Illinois, supra, at 1084.

In construction defect disputes, whether a plaintiff or defendant, consider the affirmative defense of betterment.  This consideration will help a plaintiff in putting on its case-in-chief and a defendant in putting on evidence to specifically challenge unreasonable / better repair costs.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.