ConEdison v. Arroll
Citation and Court
Consolidated Edison Co. of New York v. Arroll (N.Y.)
Facts
A contractor performed work for Consolidated Edison but did not achieve perfect compliance with every contract specification. ConEdison withheld payment, arguing that strict compliance with all conditions was required before payment became due. The contractor contended that it had substantially performed and was entitled to the contract price less any damages for minor deficiencies.
Issue
Whether a contractor who has substantially but not perfectly performed is entitled to the contract price, subject to a deduction for the cost of remedying deficiencies.
Holding
The court applied the substantial performance doctrine and found the contractor entitled to recover the contract price minus the cost to cure the minor deviations.
Rule / Doctrine
Substantial performance of a contract entitles the performing party to the contract price, less damages for any shortfall. Perfect performance is not required to trigger the other party’s duty to pay, so long as the deviations are minor and do not defeat the purpose of the contract.
Significance
Illustrates the constructive condition of substantial performance and the interaction between conditions and the duty to pay. Demonstrates how courts avoid forfeiture when a party has substantially, though not perfectly, fulfilled its obligations.