Oak Ridge Construction Company v. Tolley

504 A.2d 1343 (1985)

Purchase the Printed Copy at bsmsphd.com

Nature of the Case

To access this section all you need to do is click here and register.

Facts

P and D entered into a contract pursuant to which P agreed to construct a residence on D's property for $ 64,500. Ds provided P with specifications, which were incorporated into the contract, and a plot plan. P was to Drill a well 150' deep with 40' of 6' casing, 1/3 H.P. submersible pump, and a 21-gallon storage tank. Should well be more than 150' a charge of $6.50 per ft. will be made. Should casing be over 40' a charge of $ 7.00 per ft. will be made. Should well depth require a deep lift pump, extra cost to be borne by owner. Well-depth over 100' may require a larger pump. Before drilling began, P warned Ds that the well might be very deep because other wells in the area had been drilled to depths of 760 and 975 feet. P then drilled the well. It was completed after being drilled to a depth of 800 feet. P sent Ds an invoice including charges of $4225 for the extra 650 feet of drilling and $616 for an extra 88 feet of casing, amounts computed using the rates specified in the contract. D wrote back stating that those charges were 'in dispute or disagreement. All work under item 20 (Water Supply) . . . are [sic] to cease pending satisfactory resolution or settlement under item 13 (Arbitration) of our construction agreement.' P replied stating that it believed that Ds had breached the contract by refusing to pay the invoice and that it was giving them ten days' notice under paragraph seven of the contract. Under that paragraph, P may terminate the agreement, upon ten (10) days' written notice of any such violation or breach. Upon failure of OWNER to correct the same within the ten (10) day period, then, and in such event of termination, CONTRACTOR shall be entitled to receive payment for all unpaid materials, labor, and work of sub-contractors, for work and materials completed, installed, delivered on-site, and ordered but undelivered and not installed, plus 20% of the total contract price as liquidated damages. P noticed Ds hat it was stopping work on the house and named an arbitrator in response to D's letter and pursuant to paragraph thirteen of the contract. P sued D. The court found that Ds had committed an anticipatory breach of the contract justifying P's termination. Ds appealed.