PJC Business

PJC 101.46

C ONTRACTS

. PJC 101.46 Construction Contracts Distinguished from Ordinary Contracts (Comment) Doctrine of substantial performance. In ordinary contract cases, a party’s prior material breach prevents recovery. Bartush-Schnitzius Foods Co. v. Cimco Refrigera tion, Inc. , 518 S.W.3d 432, 436 (Tex. 2017); see PJC 101.2. This rule has been relaxed in the law of construction contracts by the doctrine of substantial performance, which allows recovery to a building contractor who has breached but substantially performed the contract. James Construction Group, LLC v. Westlake Chemical Corp. , 650 S.W.3d 392, 405 n.14 (Tex. 2022). Quantum meruit as alternate ground. In ordinary contract cases, a party cannot recover under quantum meruit if there “is a valid contract covering services or materi als furnished.” In re Kellogg Brown & Root, Inc. , 166 S.W.3d 732, 740 (Tex. 2005). “Construction contracts are an exception to this rule.” Murray v. Crest Construction, Inc. , 900 S.W.2d 342, 345 (Tex. 1995) (holding subcontractors who failed to substan tially perform contract could seek quantum meruit); see PJC 101.42 and 115.7. Con struction contract and quantum meruit questions may be submitted in the same charge under certain circumstances. See Truly v. Austin , 744 S.W.2d 934, 937 (Tex. 1988); see also Chapa v. Reilly , 733 S.W.2d 236, 237 (Tex. App.—Corpus Christi–Edinburg 1986, writ ref’d n.r.e.). Recovery. A contractor who has substantially performed may recover the full contract price less the cost of completion and remedying any defects. James Construc tion Group , 650 S.W.3d at 405 n.14. The doctrine of substantial performance also comes into play when the owner sues the contractor. If the contractor has substantially performed, the owner can recover the cost of completion less the unpaid balance on the contract price, known as the remedial measure of damages. If the contractor has not substantially performed, the measure of the owner’s damages is the difference between the value of the building as constructed and its value had it been constructed in accordance with the contract. McGinty v. Hennen , 372 S.W.3d 625, 627 (Tex. 2012); Turner, Collie & Braden, Inc. v. Brookhollow, Inc. , 642 S.W.2d 160, 164 (Tex. 1982). Competing claims for breach. When both parties claim breach, the charge should address whether either breach was material and which occurred first. See, e.g. , Bartush-Schnitzius Foods Co. , 518 S.W.3d at 435–37; PJC 101.2B.

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