Hoenig v Isaacs

Where a contract has been substantially performed, the party in breach can recover the price less the cost of remedying the defects.

Citation
[1952] 2 All ER 176
Court
Court of Appeal
Year
1952
Subject
Contract Law
Topic
Discharge and breach

Facts

Mr Hoenig, an interior decorator, agreed to decorate Mr Isaacs's flat and supply furniture, including a wardrobe and a bookcase, for £750, payable as the work progressed. Mr Isaacs paid £400, but when the work was finished he complained that it was faulty. The wardrobe door needed replacing and a bookshelf was too short, and the cost of putting these defects right was about £55. Mr Isaacs moved in and used the furniture, but refused to pay the balance of £350. Mr Hoenig sued for it.

Legal principle

The Court of Appeal held that Mr Hoenig was entitled to the balance of the price, less the £55 needed to remedy the defects. The contract had been substantially performed, because the defects were relatively minor compared with the whole work. Where there has been substantial performance of a lump sum contract, the entire performance of the contract is not a condition of payment: the innocent party must pay the price, but can deduct the cost of remedying the defects or counterclaim for damages. Denning LJ said that, in a lump sum contract of this kind, the question is whether the obligation to complete was an entire obligation or whether payment was due on substantial performance.

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