Substantial Performance or Breach of Contract?

A Unique Preference For Sinks

A few years back, before you became the personal private attorney for Tom Cruise, he had a new house built. The thing is that Tom Cruise likes to put a large number of sinks in his bathroom. For example, his master bathroom in the image above has six sinks, which the contractor built for Tom Cruise as required by contract.

Unfortunately for the contractor, the sinks used were made by Kohler, a company based in Wisconsin. Because Tom Cruise did not think enough Wisconsin residents supported his last movie venture, he put a condition in the contractor agreement that required the contractor to install sinks purchased from Elkay, a manufacturer in Illinois. When Tom Cruise learned about the presence of Kohler sinks in his bathroom, he asked the contractor to rip out the Kohler sinks and replace them with Elkay sinks (at no cost to Tom Cruise). Tom Cruise decided to hold the contractor to the perfect tender rule.

Because the sinks were already installed and in fact uniquely encased within the walls and floor, to replace the Kohler sinks with the contracted-for Elkay sinkswould have meant more than the substitution of sinks. The contractor would have had to demolish, at great expense, substantial parts of the newly completed house. As a result, the contractor left the work untouched and asked for a certificate that the final payment was due (arguing substantial performance), which Tom Cruise immediately denied.

Present Day

The contractor, now having finished construction of the new house and still not having received payment, they just filed suit against Tom Cruise to collect the remaining balance. Tom Cruise has decided that you will represent him in this lawsuit. Tom Cruise is happy to pay, but only if the Kohler sinks are ripped out and replaced with the Elkay products.

Question Presented

Having looked over the facts of this case and based upon your understanding of the law, what would you recommend to Tom Cruise? Should he settle and pay his contractor and avoid the cost, time and frustration of litigation or do you think he has a solid case that he should fight until the bitter end? Please explain the justification for your recommendation.

Answer rating: 100% (QA)

Recommendation Settle and pay the contractor While Tom Cruise does have a contractual argument based on the perfect tender rule which generally requir... View the full answer