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A building contractor was hired to do certain work. The contract stipulated that the contractor would be paid in full once the work is successfully inspected by the city building compliance inspector. The work was inspected, the contractor got paid. Shortly thereafter a defect was found (non-compliance to building code that the city inspector should have noticed, but did not). The contractor acknowledges existence of the defect, and the fact that they intentionally created it, but disputes the seriousness of the defect, deferring to successful inspection.

The contractor offers to fix the defect. However, based on the fact that contractor intentionally hid the defect in the first place, and based on other interactions with the contractor, the client believes it unlikely that the defect will be fixed right.

Question: The client prefers not to expose their property to the risk of shoddy work, and instead wants to hire another contractor to fix the problem. It is expected that the original contractor will refuse to pay the client for the cost of the repair done by a third party. In that case, is building owner likely to be successful if they sue the original contractor for the cost of repair, even though they declined that contractor's offer to fix the defect?

The jurisdiction is Pennsylvania.

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3 Answers 3

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Must one accept an offer to fix a defect before suing for damages

Not in the circumstances you describe. However, the client is entitled to recover only the damages caused by the contractor. The Restatement (Second) of Contracts speaks of relief "[on] terms as justice requires", or "to the extent that justice requires".

The contractor's "intentional" defect and concealment thereof indicates that he violated the [contract law] covenant of good faith and fair dealing. Accordingly, contract law recognizes client's right not to further trust the contractor despite the latter's offer of repair. The unspecified interactions you mention might reinforce this aspect of the client's legal position.

That being said, the contractor will most likely allege or try to prove that reimbursing you for work done by a third-party subjects him to excessive expenses (that is, greater expenses than "justice requires"). Therefore, the client should ponder which option is less of a hassle in and/or outside a court.

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  • The Restatement (Second) of Contracts is available here, now that the law firm from the link in this answer removed that resource and posted some useless "overview of contract law" instead. Commented Jan 3, 2020 at 15:02
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Yes

While one party stand ready, willing and able to complete their obligations under the contract the other party can not prevent them from doing so. If the second party does so they are in breach of the contract.

It doesn’t matter that the obligation arose from the first party’s acts and omissions- they breached the contract but they must be allowed to remedy the breach. It also doesn’t matter if the breach was intentional or accidental.

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There is a worst-case scenario where the contractor has breached his contract with the customer, by fraudulently representing the work performed. The description indicates that there was misrepresentation, but it was not necessarily material. That could close off the option of the contractor fixing the problem. It is not sufficient that the work violated code, which can be arbitrary. If the contract is explicit about letter-of-the-law code compliance, then non-compliance could be material. Or if the non-compliance put the work in the seriously incompetent realm, that would be material. Otherwise, the contractor has the option to fix the problem.

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