Smith contracted for a house that contained pipe A. The builder preferred pipe B because he owned stock in pipe B company. The two types of pipes are essentially identical. Smith sued the builder and asked for $10,000, the cost to tear out pipe B and replace it with pipe A. The difference of the value of the house with the different pipes is only $1. Should Smith get the cost to repair and replace or the difference in the value of the house or something in between?
2006-07-26 13:33:33 · 5 answers · asked by kmoe2g 1 in Politics & Government ➔ Law & Ethics
The cost to replace it, the company should've given him what he asked for...
2006-07-26 13:40:10 · answer #1 · answered by RATM 4 · 0⤊ 0⤋
This is actually based on a case commonly known as the "Reading Pipe" case studied by every first year law student in the country. In the example you gave it doesn't really matter if B owns stock in the company or not that is just a red herring. If A had owned stock in the company who made the pipe he requested that would affect the outcome. Because A had no other reason than merely a preference, a court will not award replacement value (10,000) but will award the difference in pipe value (1). The reason is the court does not want to waste the time and resources for something you will never see and doesn't really matter which pipe it is. If however, A had owned stock in the company who made the pipe he requested that would be a valid reason to justify replacement.
2006-07-26 21:14:32 · answer #2 · answered by Ty 1 3 · 0⤊ 0⤋
Did the contract actually specify pipe A? If not, there is no case. If so, Smith has a better shot asking for 'specific performance' that for damages. That would mean the original builder would have to remove the 'pipe B' and replace it with 'pipe A'. I don't think its worth the trouble to begin with. If the price paid for pipe B is more than would have been paid for pipe A, suing for a refund of the difference may be best.
2006-07-26 21:22:36 · answer #3 · answered by STEVEN F 7 · 0⤊ 0⤋
A contract is a contract whether it is $1 in difference or $10,000,000. Yes, Smith should get the cost to repair and replace the pipe. The builder double-dipped the pot - shame on him.
2006-07-26 21:01:41 · answer #4 · answered by D 4 · 0⤊ 0⤋
If I understood the question correctly Smith should get the cost to repair and replace. If they would have gone with his original choice he would have more money in his pocket. The builder cut into those profits for his own gain. The builder gambled, he lost.
2006-07-26 20:41:27 · answer #5 · answered by Anonymous · 0⤊ 0⤋