Revisiting the Skunks—Constructive Conditions of Exchange and Consolidated Service Group, LLC

In a prior post, we have concluded the contract in Consolidated Service Group, LLC v. Maxey, No. S.D. 33061 (Mo. Ct. App., S.D.) did not limit the homeowner’s ability to have efforts in mitigation obtained by a third party. We move to the second issue:

Did the homeowner’s actions discharge the contractor’s duty to perform, under principles of constructive conditions of exchange?

More after the break …

Question of Fact or Law?

The trial court granted summary judgment to the contractor. A threshold issue always is: Is a relevant issue a question of law or one of fact? Let us clarify:

The question of substantial performance is ordinarily a question of fact.

Joseph M. Perillo, Calamari & Perillo on Contracts § 11.18(b) (5th ed. 2003).

What about Missouri? Well, a review of MAI 26.07 reveals a jury instruction stating jury must find plaintiff “substantially performed”, indicating another instruction must define “substantially performed”.  MAI 16.04 defines “substantially performed” as “performance of all important parts … with only slight variations”.

And consider McAlpine Co. v. Grahaam, 320 S.W.2d 951, 954 (Mo. Ct. App., 1959):

[Instruction] No. 2 contained no standard or guide by which the jury could determine whether the defects were of sufficient substance and materiality to say that plaintiff had substantially failed to perform the contract, thereby entitling defendant to refuse to perform on the ground that plaintiff had not fully performed.

Sounds like a jury question.

In the course of teaching Contracts, reference often is made to whether an issue is one of fact or of law. We don’t typically address it for each issue—that would be too tedious. But, when it comes to preparing a brief, these issues merit prominent discussion—particularly if the court below granted summary judgment.

Was There Substantial Performance?

So, the evidence the contractor had substantially performed would need to be quite clear to support summary judgment in its favor. What did the contractor do?

Well, it is difficult to exclude the possibility the employees consciously rendered unsatisfactory performance.  The defect in the shingles was patent. Perhaps the employees did not know, on day 1, that the patent condition was a defect. But it appears they were so informed before the second day. And use of defective shingles continued.

One can often turn to Cardozo to find a wonderful turn of phrase to address an issue. Here’s what he said, in language read by thousands of law students each year:

The willful transgressor must accept the penalty of his transgression.  For him there is no occasion to mitigate the rigor of implied conditions. The transgressor whose default is unintentional and trivial may hope for mercy if he will offer atonement for his wrong.

Jacob & Youngs v. Kent, 129 N.E. 889, 891 (N.Y. 1921) (citations omitted).

  • So, to find for the contractor as a matter of law, one must:
  • reject as a matter of law the possibility that the breach was willful or reject this well-known analysis; and
  • conclude, as a matter of law, that the performance rendered by the contractor was substantial performance, understanding:
    • the contractor, through agents, initially made a substantial error,
    • then proffered a solution the contractor’s agent admitted would not result in the promised 30-year roof, and
    • again, as a matter of law, that the non-performance within the months pending the final offer to repair the roof occurred in time so that the contractor nevertheless could have rendered substantial performance—that is, the months and months delay, following a patently inadequate offer—were not enough to put the contractor into material breach.

We have said this before, as to another dispute: If the one thinks that the problem with commerce in Missouri is too much is expected of those promising to perform contracts—and that there should be more lame performance of contractual obligations—an approach of the type the contractor proposes should find favor.

This commentary was prepared based on the briefing, before review of the opinion issued by the appellate court.

A draft of this post was the subject of commentary by Wes Dagestad  and Robert Herz , students in a class styled Contracts in the Courts. The author wishes to acknowledge those helpful observations. The author, however, takes sole responsibility of any portion of this post that may prove controversial.