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Many cases have arisen where builders and contractors have failed to complete the agreed work by the time fixed in the contract. If prior to the expiration of the time the owner has extended it, and the builder relying thereon fails to use the utmost diligence to finish the work within the time originally agreed upon, there is a waiver in the strict sense of the word, and the situation thereafter is the same as if the extended time had been that originally fixed in the contract.47 If after the time has already elapsed the owner permits the builder to continue to work, even if the contract or materiality of the breach gave the owner power to terminate the contract on such a contingency, his conduct is an election to go on with the contract rather than to forfeit it, and on the completion of the work the owner is liable for the price, 48 though he is entitled to a cross-claim for any damages caused by the delay."9

47 Thornhill v. Neats, 8 C. B. (N. S.) 831; Mundy v. Stevens, 61 Fed. 77, 9 C. C. A. 366; O'Keefe v. St. Francis Church, 59 Conn. 551, 22 Atl. 325; Young v. Wells Glass Co., 187 Ill. 626, 632, 58 N. E. 605, affm. 87 Ill. App. 537; Erskine v. Johnson, 23 Neb. 261, 36 N. W. 510; Emslie v. Livingston, 51 N. Y. App. Div. 628, 64 N. Y. S. 259. See also Bloomington Hotel Co. v. Garthwait, 227 Ill. 613, 81 N. E. 714. But even though the promised extension preceded the expiration of the time allowed in the contract if the builder did not act in reliance on the promise, he is not excused from liability. Jobst v. Hayden, 84 Neb. 735, 121 N. W. 957, 50 L. R. A. (N. S.) 501. See also Empire State Surety Co. v. Hanson, 184 Fed. 58, 107 C. C. A. 1.

48 Lucas v. Godwin, 3 Bing. (N. C.) 737; Van Stone v. Stillwell, etc., Mfg. Co., 142 U. S. 128, 35 L. Ed. 961, 12 S. Ct. 181; Nibbe v. Brauhn, 24 Ill. 268; Cummings v. Pence, 1 Ind. App. 317, 27 N. E. 631; Krause v. School Trustees (Ind. App.), 66 N. E. 1010; Adams v. Hill, 16 Me. 215; Dunn v. Steubing, 120 N. Y. 232, 24 N. E. 315; Deeves v. Manhattan Life Ins. Co.,

195 N. Y. 324, 88 N. E. 395; Smith v. Smith, 45 Vt. 433; Foster v. Worthington, 58 Vt. 65, 4 Atl. 565.

49 Lawrence County v. Stewart, 72 Ark. 525, 81 S. W. 1059; Eureka Stone Co. v. First Church, 86 Ark. 212, 110 S. W. 1042, 126 Am. St. 1088; Bryson v. McCone, 121 Cal. 153, 53 Pac. 637; McIntire v. Barnes, 4 Colo. 285; Cannon v. Wildman, 28 Conn. 472; Snell v. Cottington, 72 Ill. 161; Cummings v. Pence, 1 Ind. App. 317, 320, 27 N. E. 631; Kenny v. Monahan, 53 N. Y. App. Div. 421, 424, 66 N. Y. S. 10, aff'd 169 N. Y. 591, 62 N. E. 1096; Deeves v. Manhattan L. Ins. Co., 195 N. Y. 324, 330, 88 N. E. 395; Smith v. Smith, 45 Vt. 433, 440. In Pennsylvania, apparently misled by the ambiguity of the word waiver, the court has held that the owner's consent to the continuance of the contract involves a surrender of his claim to damages. Coryell v. Du Bois Borough, 226 Pa. 103, 75 Atl. 25; Philadelphia v. Tripple, 230 Pa. 480, 79 Atl. 703; Pressy v. McCornack, 235 Pa. 443, 84 Atl. 427; and see Hutchinson v. New Sharon &c. Ry., 63 Ia. 727, 18 N. W. 915; Henderson Bridge Co. v.

Whether this claim may be voluntarily surrendered by the owner by paying the full agreed price 50 seems analogous to questions elsewhere discussed involving the surrender of a right in consideration of the performance of a contractual duty.51

§ 700. Acceptance of defective performance of a contract to sell goods does not necessarily indicate release of liability for defective performance.

Much confusion exists in American law on the right of a buyer who has accepted goods to sue for damages thereafter because of their defective quality, or because of other defects in the seller's performance. The question involved is not peculiar to the law of sales. It arises in every branch of the law of contracts. The problem is simply this: Does one party to a contract who has acquired a right to rescind it or refuse to go on with it, and who, nevertheless, allows the party in default to continue with the contract and accepts his defective, performance, thereby manifest an agreement that the performance so received shall be taken as full satisfaction of all obligations? If a party in default on a contract is allowed to continue to perform, this must necessarily involve the loss of any right of rescission or refusal to go on with the contract because of any known default that has already taken place. Thus where a buyer knowingly accepts goods which are not what he contracted to buy, he cannot rescind the sale; 52 and the retention of articles purchased is as effectual an acceptance of them as if the purchaser intimates to the seller that they are accepted.53 This presents a case of election,54 but the obligation of the party in default is not necessarily thereby terminated, nor his liability to pay damages for his insufficient performance. To produce such a result mutual assent is surely necessary; and unless it is asserted that surrender of a right may be made

O'Connor, 88 Ky. 303, 11 S. W. 18, 957.

50 In Bloomington Hotel Co. v. Garthwait, 227 Ill. 613, 81 N. E. 714, though full payment was not made, the court held the owner barred from claiming the liquidated damages for which the contract provided.

51 See supra, § 130; also infra, §§ 704 et seq.

52 Barry v. Danielson, 78 Wash. 453, 139 Pac. 223.

53 Ohio Elec. Co. v. Wisconsin, etc., Co., 161 Wis. 632, 155 N. W. 112. 54 See supra, § 683.

without either promissory estoppel or consideration, there must also be one of these elements.55 The acceptance of defective performance does not in fact always justify the conclusion that the injured party agrees to accept the defective performance in full satisfaction, and where no such assent is indicated in fact there is no mutual assent in law, except as stated in the following section. 56

55 See infra, § 727.

56 In Frankfurt-Barnett Co. v. William Prym Co., 237 Fed. 21, 28, 29, 150 C. C. A. 223, the court said: "Unless a waiver is under seal, or arises from conduct creating an estoppel, it must be supported by an agreement founded upon a valuable consideration. Emerson v. Slater, 22 How. 28, 16 L. Ed. 360; Hastings v. Lovejoy, 140 Mass. 261, 2 N. E. 776, 54 Am. Rep. 462; Underwood v. Farmers', etc., Ins. Co., 57 N. Y. 500; Atlantic Coast Line R. Co. v. Bryan, 109 Va. 523, 65 S. E. 30. . . .

"In Page on Contracts, vol. 3, § 1519, that writer correctly says that waiver of the right to treat a breach of contract as a discharge of contract liability may take place without a waiver of the right to maintain an action for damages, and the weight of authority is that it is not such a waiver. And in section 1510 the same writer states that acceptance after breach is not a waiver of a right of action for damages is apparent when it is considered that the party not in default is often constrained by his necessities to take what he can get under his contract when he can get it.

...

"In Granniss, etc., Co. v. Deeves, 72 Hun, 171, 25 N. Y. S. 375, Judge Van Brunt, speaking for the court said: 'Undoubtedly the defendant had the right to terminate the contract if the plaintiff was not proceeding with that diligence which the terms of the contracts required; but this was not his only remedy. He had a right to let the plaintiff go on and complete his work, and then he had the right to say: 'I

will pay you for the work you have done, but I want the damages you have caused me in not doing my work as you agreed to do it.' The court understood that to be the principle decided in Dunn v. Steubing, 120 N. Y. 232, 24 N. E. 315. In Crocker-Wheeler Co. v. Varick Realty Co., 104 N. Y. App. Div. 568, 88 N. Y. S. 412, 94 N. Y. S. 23, the parties had entered into a contract for the installation of an ele vator in a building. The contractor did not complete the contract within the prescribed time. The owner did not exercise the right to terminate the contract, but permitted the contractor to go on and complete the work. The court held that the owner thereby waived the right which it otherwise might have asserted to plead the delay in the performance of the contract as a defence to an action for the agreed price of the elevator; and it was also held, and that is the portion of the decision with which we are particularly concerned, that the owner did not thereby waive its right to counterclaim, in an action brought by the contractor to recover the agreed price of the elevator, the amount of any actual damages which it had suffered by reason of the delay in performance.

"This doctrine was again announced in Beyer v. Henry Huber Co., 115 N. Y. App. Div. 342, 100 N. Y. S. 1029; and in Reading Hardware Co. v. City of New York, 129 N. Y. App. Div. 292, 113 N. Y. S. 331; as well as in General Supply & Construction Co. v. Goelet, 149 N. Y. App. Div. 80, 133 N. Y. S. 978."

§ 701. If goods are offered as full satisfaction they must be taken as such if taken at all.

Where an offer is made which contemplates action on the part of the offeree, which can only be rightfully taken if the offer is accepted, the offeree is not allowed to take the action and yet assert that he did not accept the offer. The commonest illustration of this principle is where a check is sent in full satisfaction of an unliquidated claim." But it is equally applicable where unspecified goods are contracted to be sold by description. If, therefore, the seller notifies the buyer that the goods which he, the seller, is tendering are tendered in full discharge of the seller's liabilities, an acceptance of the goods by the buyer will necessarily involve assent to the proposition. Only on the assumption of such assent is the buyer entitled to the goods. True, he may have a contract right for some goods of the sort, but he has no right to enforce the contract by taking goods from the seller against the latter's will. As, however, a contract, of accord and satisfaction, if made, will be in derogation of the buyer's rights and will operate to discharge one who is by hypothesis failing to perform a legal duty, no artificial presumption should be made that the offer of the seller when he tenders the goods is made only on the condition that they shall be accepted as full satisfaction. Moreover, there is involved a question of consideration as well as of mutual assent. If the seller is merely fulfilling a legal duty in delivering the goods, his doing so will not support an agreement to discharge him from liability; 58 and though the giving of goods, different even inferior to those contracted for will suffice as consideration, 59 the mere fact that goods which are due are delivered later than was agreed, it seems will not make the delivery sufficient. It is true that unless the contract was for specific goods, the seller, though he was bound to deliver goods of the kind which he does, was not bound to deliver those particular goods. But neither is a debtor who pays part of a debt in attempted satisfaction of the whole bound to pay the particular money which he does, yet that fact does not make his payment suffice as consideration for a promise by the creditor.60

5 See infra, § 1854.

See supra, § 130.

59 Ibid.

60 See supra, § 121, also infra, § 704.

§ 702. Acceptance of defective performance by a buyer. There is no reason why the rule in the law of sales should differ from that elsewhere in the law of contracts. When insufficient performance is tendered to the buyer he should not be debarred from recovering damages because of the insufficiency, unless he has agreed to accept what has been offered him as full satisfaction of all his rights, and has received sufficient consideration or his agreement. There seems no ground

for saying that the mere fact that he has taken the goods indicates such assent.61

If ten barrels of flour are contracted for and five are sent, the fact that the buyer takes the five sent certainly does not indicate that he assents to the performance as a full satisfaction. It is a partial performance and partial satisfaction, and he takes it as such; nor is he bound to assume that the seller intended it otherwise. If all ten barrels are sent, but later than they should have been, the same reasoning is applicable. And in the common case where the defect in the performance is the inferior quality of the flour, it is also true that taking the flour does not prove that the buyer agrees to accept it as full satisfaction. As the hypothesis is that the performance is not what the contract requires, the burden is upon the seller to prove an assent to receive it as such. Taking the flour does not necessarily show assent, in fact, to excuse the seller from his breach of contract, and there seems no reason for laying down as an absolute rule of law, which must in a measure be fictitious, that assent is to be conclusively presumed. The weight of authority supports the view here taken but less definitely in regard to the last proposition than the others.

§ 703. The buyer may sue for defective quantity.

The buyer need not accept any performance if the goods offered are too many or too few to satisfy the contract.62 Sometimes, however, he does take what is offered to him, but

61 "It is not the law that the acceptance of the performance of one service or duty when two are due, is an abandonment of all claim of damages for the service not performed." Dicks v.

Belsher, 80 Ala. 369; North Alaska
Salmon Co. v. Hobbs, etc., Co., 159
Cal. 380, 113 Pac. 870, 120 Pac. 27.
62 See infra, § 958.

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