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Contracts • Excuse of Non-Performance
K#128
Legal Definition
In a divisible contract, the breaching party can recover for substantial performance of a divisible part, even though they breached the entire contract. Look to whether the price is stated as a lump sum or on a per performance basis.
Plain English Explanation
Many contracts are not divisible. For example, if I offer to pay you $40 to paint my house and you only paint 1 wall before getting bored and walking off, I don't need to calculate the value of you painting that single wall vs. the value of you painting my entire house. However, if I offer to pay you $40 to paint a room, and you only paint 1 of the 4 walls, there may be an argument that the contract is divisible and that each wall of equal size is worth $10.
Hypothetical
Hypo 1: Bob builds house. Sam tells Bob he will pay him $1,000,000 to develop his land into a neighborhood of 10 $100,000 houses. After years of work, Bob has some health issues and only completes 6 of the 10 houses. Sam says, "Sorry, we agreed to 10 houses. You get nothing." Result: This is the perfect example of a divisible contract. Yes, the agreement technically requires Bob to build 10 houses, however, allowing Sam to keep the 6 completed houses would be unjust enrichment. Here, the court would allow Bob to sue Sam for $600,000 for the 6 $100,000 houses he completed.
Visual Aids
Related Concepts
How is performance affected when the subject matter of the contract is damaged or destroyed?
Under common law, is late performance a material breach?
Under common law, when is counter-performance excused?
Under contract law, what is a modification?
What is excuse due to anticipatory repudiation?
What is excuse due to improper performance?
What is frustration of purpose?
What is impracticability?
What is the doctrine of impossibility?
What level of compliance is required to satisfy an express condition?
What options does the non-breaching party have in response to an anticipatory repudiation?
