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32. If each party sues the other for breach of contract, which of the following will the court decide?
After completing 25 percent of the garage according to the homeowner's specifications, the builder demanded $2,000 as a reasonable progress payment. The homeowner refused, and the builder abandoned the job.
Under the terms of a written contract, a builder agreed to construct a garage for a homeowner for $10,000. Nothing was stated in the parties' negotiations or in the contract about progress payments during the course of the work.
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A is incorrect. The homeowner is not in breach; his duty to perform has not become due, because the builder has not completed its performance. Where one party's performance is to take place over a period of time, that party (in this case, the builder) must complete its performance before the other party is required to perform, unless the language or circumstances indicate otherwise.
C is incorrect. The homeowner is not liable because the builder's abandonment was unjustified. The homeowner was legally justified in refusing to make the $2,000 progress payment to the builder. Where one party's performance is to take place over a period of time, that party (in this case, the builder) must complete its performance before the other party is required to perform, unless the language or circumstances indicate otherwise.
D is incorrect. The builder wrongfully repudiated by abandoning the project without justification. Where one party's performance is to take place over a period of time, that party (in this case, the builder) must complete its performance before the other party is required to perform, unless the language or circumstances indicate otherwise.