Appellant Hayden Carter contracted to build a dwelling house for appellees Lee and Irline Quick on property they owned about one mile west of Paragould. The oral contract was entered into sometime in October, 1973. Plans and specifications were furnished by the Quicks. The agreed price was $25,000. The Quicks moved into the house in December, 1973, and were occupying it when this suit was filed. They commenced this action for breach of contract, alleging that Carter had represented and warranted that the residence would be constructed in a good workmanlike manner and that the quality of construction would be equal to, or better than that of Carter’s own residence. The Quicks also alleged negligence in the performаnce of the contract. Carter denied all material allegations of appellees’ complaint. 1 The case was tried by the court, without a jury, and judgment for $4,060 for damages was granted the Quicks, but Carter was allowed $205 on his cross-complaint, which was not abstracted. Carter alleges several grounds for reversal and we find merit in one of them and reverse the judgment on that account.
Carter moved for a “directed verdict” on the ground, among others, that the Quicks failed to show a breach of the contract because no evidence was presented as to the quality of workmanship of his own residence. The Quicks had complained more about the workmanship in the brick veneer on their house than anything else, but they also comрlained of the Fireplace, allegedly out-of-plumb doors and windows, the use of ungalvanized nails in walls, the location of a switch and fuse box and floors they said were not level. There was substantial evidence that the workmanship in laying the brick was defective and the circuit court gave judgment on this item for the lowest estimate of the cost of replacement, $4,000. He also allowed $20 for reframing the garage door, $20 for moving either a fuse box or a water heater and $20 to repaint the garage to cover rust on ungalvanized nails. There was substantial evidence to support the awards of all except the last item. On that item, it seems clear that appellees prevented the repainting that Carter offered to do.
The terms of the contract were shown by the testimony of Lee Quick and Carter. Lee Quick said that Carter declined to enter into a written contract but promised that “he would build the house the same quality and be as good as his own,” with certain exceptions not material here. Prior to this agreement, the Quicks had viewed Carter’s residence. Carter testified that he told the Quicks, “If you want to lоok at my house, look it over. I’ll build you one just like it with the same material and workmanship as my house.” He said that he used ungalvanized nails in his own house and that they are visible. He also testified that the brickwork on his own house was comparable to that on the Carter house and that the Quick house was “as good and workmanlike as the house I was living in at the time.” The abstract of the evidence does not reflect any evidence that Carter agreed, as the Quicks alleged, that the house “would be constructed in a good and workmanlike manner with proper construction.” 2 Carter’s testimony was the only evidence pertaining to the quality of the workmanship on his own house.
We are not presently concerned with the question whether there was an implied warrаnty of the quality of the materials and workmanship used on the construction of the Quick home. For the purposes of this opinion, we assume that there was. But, according to the testimony in this case, there was an express warranty. Although we have no cases involving, the effect of an express warranty upon an implied warranty in building contracts, we conclude that implied warrаnties are not applicable when there is an express warranty, by analogy to pre-Commercial Code sales contract cases, the reasoning in such cases being appropriate to a contract such as this. The oral contract here was based upon an express warranty of quality in unequivocal language even though the words “warrant” and “warranty” were never used. Harris v. Hunt,
Appellant also questions the measure of damages applied by the trial judge, i.e., the cost of replacing the allegedly defective brickwork. It is highly likely that this question will arise on retrial. Appellant contends that the proper measure of damages is the difference between the value of the building erected and the value of the building if it had been built according to the contract. In making this argument, appellant relies on Restatement of the Law, Contracts § 346 (1) (a) (ii) and language in our opinion in J. E. Hollingsworth & Co. v. Leachville Special School District,
Thе difference between the value that the product contracted for would have had and the value of the performance that has been received by the plaintiff, if construction and completion in accordance with the contract would involve unreasonable economic waste.
See also, 5 Corbin on Contracts 485, 491, § 1089.
In Hollingsworth, we approved the following declaration оf law.
A substantial compliance by the contractor is all that is required under the law, he being charged (where there is a substantial compliance) with the difference in value between the work as done and as contracted to be done, or the replacement of defective work where this can be done without great expense or material injury to the structure as a whole.
We also approved an award by the chancellor of the cost of tearing down and removing defective work and rebuilding a school building according to the original plans. The chancellor had stated the question to be decided thus:
Could the defective masonry have been replaced with reasonable expense without tearing down the whоle structure? If it could, then the district is entitled to charge only what such cost would have been, together with difference in value of brick, steel, lugs, caps, bases, etc., furnished and those contracted for. On the other hand, if the inferior masonry was all over the building so that the structure was unsafe (and the maximum of safety is required for school buildings where hundreds of little children are housed), and it was nеcessary to rebuild in order to be certain of durability, then the district was justified in dismantling the house as a whole and in the rebuilding to use materials conforming strictly to the contract.
That case was a suit by the contractor for breach of contract after his work had been stopped by the owner before the building was complete. The owner (school district) cross-complained. The damages awarded were the costs of the completed building, including the cost of tearing down and removing defective parts of the work done by the contractor. It seems, however, that the principles stated in the above quotations should apply in a case like this one where construction was completed and the contractor paid.
The underlying purpose in awarding damages for breach of contract is to place the injured party in as good position as he would have been had the contract been performed. Rebsamen Companies, Inc. v. Arkansas State Hospital Employees Federal Credit Union,
The rule established by decisions of this court is that, where a building contraсt is substantially performed, even though there are omissions and deviations therefrom, if such defects do not impair the structure as a whole and are remedial “without doing material damage to other parts of the building in tearing down and reconstructing, and may without injustice be compensated by deductions from the contract price, ” there may be a recovery for the аmount found due after making such deductions. ***
See also, Harris v. Holder,
It has been said that as a general rule the cost of correcting^ defects, rather than the difference in value, is the proper measure of damages where the correction would not involve unreasonable destruction of the work and the cost would not be grossly disproportionate to the results to be obtained. 13 Am. Jur. 2d 79, Building & Construction Contracts, § 79. See also, 5 Corbin 491, § 1089, where the author says that the cost of curing defects should be the measure whether the breach of the contract is large or small and that it should be applied in every case, except where the actual curing of the defects would causе unreasonable economic waste. This view is consistent with the result in Hollingsworth, where the contention was that the owner had not properly proved its damages.
It has been held in other jurisdictions that the cost of correction, even though substantial, if not grossly and unfairly disproportionate to the good to be attained, rather than the “difference in value” is particularly аppropriate where the building is a dwelling house. Ritchey v. Sato,
We note also that the “cost rule” of damages has been applied in many cases where the defects were in floors, walls and roofs. See Southern Surety Co. v. Sealy Independent School Dist.,
Appellant contends that the cost of replacement of the brickwork was so excessive that, as a matter of law, the cost of replacement measure of damages is inapplicable, and since the value of the house as constructed exceeds the contract price, appellee was not entitled to recover. The burden of рroving affirmatively and conclusively that the cost was unreasonable, or an economic waste, was on appellant. County of Maricopa v. Walsh & Oberg, Architects,
Appellant also contends that he was entitled to a directed verdict because appellees were constantly at the construction site and the defects of which they complain were readily apparent and because they accepted the residence as constructed. We consider the evidence on this question to be somewhat less than conclusive. There is some dispute about the frequency of Mrs. Quick’s visits to the job site and оf her complaints or instructions about the work. We feel, however, that even if it be taken as established that all the defects were obvious and not latent, there was a question of fact as to waiver. There was evidence that Carter asked that a loan being made to the Quicks on the completed house be closed by December 15, 1973, when the lending agency closed its fiscal year and that the Quicks did so, and paid Carter, relying upon Carter’s promise that he would return and finish any work that was incomplete and remedy any defects. There was also testimony that Lee Quick was in ths hospital at the time and that his wife moved into the house while he was in this hospital. There was also testimony that Carter had made some effort to correct some of the defects. It is also signficiant that this house was built on property owned by the appellees.
If appellant had not been fully paid and had sued for a balance due him, there would be little room for doubt about the inapplicability of waiver in this case. It is well established by our decisions that a contractor suing for the contract price, on the balance due him, аfter acceptance of the work by the owner, may only recover the contract price less the costs of correcting defects. Fitzgerald v. LaPorte,
Waiver of defects is a question of fact to be determined from the circumstances of the case. Mitchell v. Carlson,
When all the circumstances here are considered collectively, we cannot say that there was a waiver as a matter of law. Acceptance upon assurances that defects would be corrected is not alone sufficient to constitute waiver. Dutton & Barnes v. McIlroy,
It has been held that an owner who was convalescing from an illness when a house being built for him was completed, so that he was unable to inspect it, but who, upon insistence of the builder, went to a bank to borrow the last payment due on the contract and paid the contractor, with the definite understanding that the contractor would make any adjustments with the owner that proved to be proper, did not waive his right to assert defective performance. Temple Lumber Co. v. Miller,
The judgment is reversed and the cause remanded.
Notes
Carter аlso alleged that the contract was not with him but was with Carter Construction Company, Inc. This defense seems to have been waived. At any rate, no point is made of it.
Appellees say in their brief here that Carter admitted in a deposition that he expressly agreed that the house would be completed and finished in a good, workmanlike manner. There is no indication that this deposition, which was not abstracted because appellant treated it as irrelevant on appeal, was ever introduced or offered in evidence.