Section 4.19 Action by the Owner

• Library: Contracts 2016 Supp

b. (§4.19) Action by the Owner

When the contractor has completely failed to perform, the owner’s damages are the difference between the contract price and what it will cost to construct the structure according to the plans and specifications. Simons v. Wittmann,88 S.W. 791 (Mo. App. E.D. 1905). When the contractor has partially performed, the owner’s damages are the costs of completion. Edmonds v. Stratton, 457 S.W.2d 228 (Mo. App. S.D. 1970).

When the contractor’s performance is defective, the owner may seek damages equal to either:

· the cost of reconstruction and completion according to the terms of the contract, Samuels v. Ill. Fire Ins. Co., 354 S.W.2d 352 (Mo. App. W.D. 1961); or

· the difference between the value of the structure as it was constructed and its value if it had been constructed according to the plans and specifications, referred to as diminution in value, Kahn v. Prahl, 414 S.W.2d 269 (Mo. 1967).

But if unreasonable economic waste would occur in bringing the structure into conformity with the contract plans and specifications, the owner’s damages are limited to diminution in value. Forsythe v. Starnes, 554 S.W.2d 100 (Mo. App. E.D. 1977). The burden of proving that curing defects will result in unreasonable economic waste is on the contractor, and any doubt...