Does a contractor's unintentional and trivial deviation from a contract specification, here installing plumbing pipe from manufacturers other than the specified Reading brand, bar recovery of the contract balance, such that the owner's remedy is limited to damages measured by the difference in value rather than the cost of replacement?

Jacob & Youngs (plaintiff), a contractor, built a country residence for Kent (defendant) at a cost of upwards of $77,000 and sued to recover an unpaid balance of $3,483.46. Construction ceased in June 1914, and Kent began occupying the house. No complaint of defective performance was made until March 1915. The plumbing specifications required that all wrought iron pipe be galvanized, lap welded "standard pipe" of Reading manufacture. In March 1915, Kent learned that some of the pipe came from other manufacturers, such as Cohoes, rather than Reading. Kent's architect directed the plaintiff to replace the pipe, but by then the plumbing was encased in the walls, so compliance would have required demolishing substantial parts of the completed house at great expense. The plaintiff refused, and the architect refused to certify final payment. The evidence supported a finding that the omission was neither fraudulent nor willful but resulted from the oversight of the plaintiff's subcontractor. The brands differ only by the manufacturer's name stamped on the pipe at intervals of six to seven feet, and even Kent's architect failed to notice the discrepancy on inspection. The plaintiff offered evidence that the installed pipe was identical in quality, appearance, market value, and cost to Reading pipe.

Jacob & Youngs sued Kent in trial court to recover the unpaid contract balance. The trial court excluded the plaintiff's evidence that the substituted pipe was equivalent in quality, appearance, market value, and cost, and directed a verdict for the defendant. The Appellate Division reversed and granted a new trial. Kent appealed to the New York Court of Appeals, which affirmed the Appellate Division's order and directed judgment absolute for the plaintiff on the stipulation, with costs in all courts.

(Cardozo, J.)

No, it does not bar recovery. An innocent and trivial omission does not forfeit recovery of the contract price; the owner is entitled only to compensation for the resulting damage, measured here by diminution in value, not the cost of replacement.

The courts do not hold that a contracting party satisfies its duty by less than full performance, but an omission that is both trivial and innocent may be compensated by an allowance for the resulting damage rather than treated as the breach of a condition triggering forfeiture. Promises exist on a spectrum from independent to dependent. Some promises, though dependent and therefore conditions when the departure is substantial, are treated as independent and collateral when the departure is insignificant. Considerations of justice and presumable intention determine the classification. Intention is presumed to contemplate the reasonable and probable, and there is no assumption that parties intended to visit venial faults with oppressive retribution.

The line between the important and the trivial cannot be fixed by formula. The court must weigh the purpose to be served, the desire to be gratified, the excuse for deviation, and the cruelty of enforced adherence. Change will not be tolerated if so dominant or pervasive as to frustrate the purpose of the contract substantially. Builders have no general license to install whatever they consider "just as good." The willful transgressor accepts the penalty of the transgression, but the transgressor whose default is unintentional and trivial may hope for mercy upon offering atonement. The parties remain free, by apt and certain words, to make literal performance of every term a condition of recovery, but silence will not support that inference where the default is grievously out of proportion to the forfeiture.

The ordinary measure of damages is the cost of completion, but where that cost is grossly and unfairly out of proportion to the good to be attained, the measure is the difference in value. Replacing the pipe would require demolishing parts of the house, while the difference in value is nominal or nothing. The excluded evidence should have been admitted.

Dissent (McLaughlin, J.) The plaintiff did not perform its contract, and its failure was intentional or the product of gross neglect amounting to the same thing. Only about two-fifths of the pipe was Reading pipe, and the plaintiff offered no explanation and no proof of the cost of compliance. Substantial performance depends heavily on the contractor's good faith, and this was not a minor omission due to inadvertence. Kent had the right to contract for what he wanted, even if the preference was a whim, and agreed to pay only upon the condition that Reading pipe be installed. That the substituted pipe was just as good is no answer; the specifications are the law between the parties, and allowing substitution would make a new contract and encourage violation of engagements. Relying on Smith v. Brady, the dissent concludes that the substantial performance rule does not apply and that the directed verdict for the defendant was proper.