A homeowner contracts with a roofing company to replace their entire roof for $15,000. The contract specifies that the new shingles must be 'weathered wood' color. Due to a supply chain issue, the roofing company installs 'charcoal gray' shingles, which are of identical quality and cost, and are commonly used in the area. The homeowner is upset and demands the roof be replaced with 'weathered wood' shingles. What is the most likely outcome regarding damages?
- AThe homeowner can recover the full cost of replacing the roof with 'weathered wood' shingles.
- BThe homeowner can recover the difference in value between a roof with 'weathered wood' shingles and one with 'charcoal gray' shingles, if any.
- CThe homeowner can rescind the contract and recover all payments made to the roofing company.
- DThe homeowner is entitled to specific performance, forcing the roofing company to replace the roof.
Show answer & explanationAnswer & explanation
Correct answer: B. The homeowner can recover the difference in value between a roof with 'weathered wood' shingles and one with 'charcoal gray' shingles, if any.
This scenario involves a minor breach where the cost of correcting the defect (replacing the entire roof) would result in economic waste compared to the diminution in value. Courts typically award damages based on the difference in value rather than the cost of repair if the latter is disproportionately high.
Why the other options are wrong
- A. This would likely constitute economic waste, as the cost of replacement far outweighs the diminution in value for a minor aesthetic difference.
- C. Rescission is typically reserved for material breaches or fundamental contract defects, not for a minor deviation in color.
- D. Specific performance is generally not available for construction contracts or for minor breaches where monetary damages are adequate.
Economic Waste Doctrine
A principle in contract law that limits damages for breach if the cost of repair or completion is disproportionately high compared to the resulting increase in value of the property.
- Applies typically to construction contracts.
- Prevents awarding damages that would be economically irrational.
- Damages are usually limited to diminution in value rather than cost of completion.
Memory trick: Building a house, but the 'wrong' color paint; don't tear it down, just pay the difference.