CV2201 Construction Contract Instruction Notes

These instructions name the owner and the contractor as the parties. They should be amended appropriately if the parties are the contractor and the subcontractor. The user may also want to consult the instructions for Commercial Contracts.

CV2202 Compliance with public bidding instructions.

[Name of contractor] claims that [name of governmental entity] was required by law to award [him] the construction contract. [Name of governmental entity] claims that [describe claim].

[Name of governmental entity] is not required to accept any bid. However, if [name of governmental entity] did accept a bid, it was required to accept the lowest "responsive responsible" bid. The contractor who submitted the lowest responsive responsible bid is the one who:

(1) submitted a bid that complies with the invitation to bid;

(2) submitted a bid that satisfies the plans and specifications of the invitation to bid;

(3) satisfies [name of owner governmental entity]'s requirements for financial strength, capacity to perform, integrity, and/or reliability;

(4) provides a bid bond or equivalent money as a condition of the construction contract; and

(5) provides a payment and performance bond as required by law.

If you find that [name of contractor] submitted the lowest responsive responsible bid and that [name of governmental entity] accepted a different bid, then [name of governmental entity] is liable to [name of contractor] for damages.

References

Utah Code Sections 11-39-101(10), 11-39-103 and 11-39-107.
Cal Wadsworth Const. v. City of St. George, 898 P.2d 1372, 1375 (Utah 1995).
Rapp v. Salt Lake City, 527 P.2d 651, 654 (Utah 1974).
Thatcher Chem. Co. v. Salt Lake City Corp., 445 P.2d 769, 771 (Utah 1968).
Schulte v. Salt Lake City, 10 P.2d 625, 628 (Utah 1932).

Committee Notes

There are statutory exceptions to the general rule expressed in this instruction. Utah Code Section 11-39-104.
CV2203 "Responsive bid" defined.

A bid is "responsive" if it provides all information and documentation required by the invitation to bid.

References

Utah Code Sections 63G-6-103(25) and 63G-6-401(7)(a).
Cal. Wadsworth Const. v. City of St. George, 898 P.2d 1372 (Utah 1995).
Taylor Bus Service, Inc. v. San Diego Bd. of Education, 195 Cal.App.3d 1331 (Cal. Ct. App. 1987).
Konica Business Machines U.S.A., Inc. v. Regents of Univ. of California, 206 Cal.App.3d 449 (Cal. Ct. App. 1988).
CV2204 "Responsible bid" defined.

A "responsible bid" is a bid made by a party who has the capability, integrity and reliability to fully perform the contract requirements in good faith.

References

Utah Code Sections 63G-6-103(24) and 63G-6-401(7).
Cal. Wadsworth Const. v. City of St. George, 898 P.2d 1372 (Utah 1995).
Rapp v. Salt Lake City, 527 P.2d 651 (Utah 1974).
Taylor Bus Service, Inc. v. San Diego Bd. of Education, 195 Cal.App.3d 1331 (Cal. Ct. App. 1987).
City of Inglewood-L.A. County Civic Ctr. Auth. v. Superior Court, 500 P.2d 601 (Cal. 1972).

Committee Notes

"Good faith" is used in the statutory definition of "responsible bid", but is itself not a defined term.
CV2205 Contractor's right to withdraw bid.

[Name of contractor] claims that [he] had the right to withdraw the bid even though the [statute/invitation to bid] states that a bid may not be revoked. To succeed on this claim, [name of contractor] must prove that:

(1) the bid contains a substantial clerical or mathematical mistake, as opposed to an error in judgment;

(2) [name of contractor]'s mistake was unintentional; and

(3) [name of contractor] communicated the mistake to [name of owner] before the contract was awarded.

References

Union Tank Car Co. v. Wheat Bros., 387 P.2d 1000 (Utah 1964).
Sulzer v. Bingham Pumps, Inc. v. Lockheed Missiles & Space Co., 947 F.2d 1362 (9th Cir. 1991).
First Baptist Church v. Barber Contracting Co., 377 S.E.2d 717 (Ga. Ct. App. 1989).
M.J. McGough Co. v. Jane Lamb Memorial Hosp., 302 F.Supp. 482 (S.D.Iowa 1969).
ABA Model Instruction 3.03.
Restatement (Second) of Contracts sect. 153 (illustration 1).
Corbin on Contracts sect.609.
CV2206 Owner's duty to inform.

[Name of contractor] claims that [name of owner] had a duty to disclose the following information before the bid was submitted: [describe information.] You must decide whether, [name of contractor] has proved that:

(1) [name of owner] did not disclose the above-described information to [name of contractor];

(2) the undisclosed information was important to [name of contractor]'s ability to perform the contract; and

(3) [name of owner] had knowledge about the undisclosed information that was not available to [name of contractor].

If you find that [name of contractor] has proved all of these facts, then [name of owner] is liable to [name of contractor] for damages.

References

Bruner & O'Connor on Construction Law sect. 3:25 (2002).
Guarantee State Bank v. Farm Service Agency, 68 Fed.Appx 134, 137 (10th Cir. 2003).
J.F. Shea Co., Inc. v. U.S., 4 Cl. Ct. 46, 53 (1983).
Welch v. State of California, 139 Cal.App.3d 549, 188 Cal.Rptr. 726 (1983).
CV2207 Contractor's right to rely on owner-furnished information.

[Name of contractor] claims that [he] should recover the costs of extra work caused by inaccurate or misleading information provided by [name of owner]: [describe information.] To succeed on this claim, [name of contractor] must prove that:

(1) [name of owner] provided the information to [name of contractor];

(2) the information was inaccurate or misleading;

(3) [name of contractor] reasonably relied on the information; and

(4) the information caused [name of contractor] to perform extra work, which added to [name of contractor]'s [time/costs].

References

United States v. Spearin, 248 U.S. 132, 39 S. Ct. 59, 63 L.Ed. 166 (1918).
Jack B. Parson Const. Co. v. State, 725 P2d 614 (Utah 1986).
Thorn Const. Co. v. Utah Dept. of Transp., 598 P.2d 365, 368 (Utah 1979).
Hensel Phelps Const. Co., 413 F.2d 704 (10th Cir. 1969).
Wunderlich Contracting Co. v. U.S., 240 F.2d 201, 205 (10th Cir. 1957).
Railroad Waterproofing Corp. v. U.S., 137 F.Supp. 713, 715 (Ct. Cl. 1956).
CV2208 Promissory estoppel.

[Name of contractor] claims that [name of owner] must perform as promised even though there was no contract between them. To succeed on this claim, [name of contractor] must prove that:

(1) [name of owner] was aware of all the important facts;

(2) [name of owner] promised to [describe promise];

(3) [name of owner] knew or should have expected that this promise would lead [name of contractor] to act or not act;

(4) [name of contractor] reasonably relied on the promise;

(5) [name of contractor]'s action or inaction resulted in damages.

References

Youngsblood v. Auto-Owners Ins. Co., 2007 UT 28.
Tolboe Const. Co. v. Staker Paving & Const. Co., 682 P.2d 843 (Utah 1984).
Union Tank Car Co. v. Wheat Bros., 387 P.2d 1000 (Utah 1964).
Hess v. Johnston, 2007 UT App. 213.
See Instruction CV2114, Promissory estoppel.
CV2209 Defective plans and specifications.

If [name of contractor] proves that [he] acted reasonably in following [describe plans and specifications] provided by [name of owner], then [name of contractor] can recover from [name of owner] the costs caused by reasonable reliance on the plans and specifications.

References

United States v. Spearin, 248 U.S. 132, 39 S. Ct. 59, 63 L.Ed. 166 (1918).
SME Industries, Inc. v Thompson, Ventulett, Stainback and Associates, Inc., 2001 UT 54, 28 P.3d 669 (Utah 2001).
R.C. Tolman Constr. Co. v. Myton Water Ass'n, 563 P.2d 780 (Utah 1977).
Jack B. Parsons Constr. Co. v. State, 725 P.2d 614 (Utah 1986).
Thorn Construction Co. v. Utah Dep't of Transportation, 598 P.2d 365 (Utah 1979).
CV2210 Contractor's duty to inquire about or investigate specific information provided by owner.

[Name of contractor] claims that [name of owner] made the following incorrect representations: [describe the representations]. [Name of contractor] claims that [he] is entitled to damages caused by relying on the representations.

However, [name of owner] claims [he] is not liable for [name of contractor]'s damages because [name of contractor] should have investigated or inquired about each representation before submitting a proposal.

In order for [name of contractor] to establish that there was no obligation to investigate or inquire about the representations, [name of contractor] must prove that:

(1) [describe the representations] were incorrect;

(2) [name of contractor] should not reasonably have been expected to recognize that the representation was incorrect; and

(3) [name of owner] did not warn [name of contractor] that the specific representation(s) may not be reliable and may require further investigation or inquiry; and

(4) [name of contractor] conducted a reasonable inspection of the work site or made reasonable inquiry about the representations to confirm their accuracy before submitting a proposal.

References

Jack B. Parson Constr. Co. v. State, 725 P.2d 614 (Utah 1986).
Frontier Foundations, Inc., 818 P.2d 1040, 1041 (Utah App. 1991)Thorn Constr. Co. v. Dept. of Transp., 598 P.2d 365 (Utah 1979).

Committee Notes

Prevailing case law holds that general disclaimers do not operate to require a contractor to investigate the truthfulness of the affirmative representations; instead, specific disclaimers are required.
CV2211 Claim for damages due to interference.

[Name of contractor] claims [name of owner] interfered with [name of contractor]'s work. To succeed on this claim, [name of contractor] must prove that:

(1) [name of owner] interfered with [name of contractor]'s ability to perform the contract;

(2) the interference was unreasonable under the circumstances;

(3) the interference caused [name of contractor]'s damages.

References

Lester N. Johnson v. City of Spokane, 588 P.2d 1214 (WA App. 1985).
Steven G.M. Stein, Construction Law, 5.03[2][c][ii].
CV2212 Claim for additional costs due to acceleration.

[Name of contractor] claims that [he] is entitled to recover extra costs incurred because [name of owner] [required [him] to perform the work in less time than required by the contract] [increased the scope of work and did not increase the contract time].

To succeed on this claim [name of contractor] must prove that:

(1) [name of contractor] is not at fault for any delay related to the claim;

(2) [name of owner]:

[(a) ordered [name of contractor] to complete the work in less time than required by the contract]

[(b) increased the scope of the work, but did not grant [name of contractor] an extension of time]; and

(3) [name of contractor] incurred extra costs.

References

Procon Corp. v. Utah Dep't of Trans., 876 P.2d 890, 894 (Utah Ct. App. 1994).
Bruner & O'Connor on Construction Law, sect. 15:89 (2002).
CJS Contracts sect. 391.

Committee Notes

The judge should instruct the jury only on those elements, (2)(a) or (2)(b), for which there is evidence.
CV2213 Claim for additional costs/time due to denial of access to worksite.

[Name of contractor] claims [he] had additional costs and/or was delayed because [name of owner] failed to provide access to the worksite. To succeed on this claim, [name of contractor] must prove that:

(1) [he] was prepared to work on [dates];

(2) [his] failure to perform the work was exclusively because [name of owner] failed to [describe denial of access]; and

(3) [he] had additional costs and/or was delayed.

References

Higgins v. City of Filmore, 639 P.2d 192 (Utah 1981).
Burgess Constr. Co. v. M. Morrin & Son Co., Inc., 526 F.2d 108 (10th Cir. 1975).
Steven G.M. Stein, Construction Law, 5.03[2][c][ii].
Bruner & O'Connor on Construction Law, sect. 15:51.
CV2214 Claim for extra work.

[Name of contractor] claims additional [time/compensation] for work that [name of owner] required but that was not part of the original contract. To succeed on this claim, [name of contractor] must prove that:

(1) the work was not in the parties' original contract;

(2) [name of owner], by words or conduct, directed [name of contractor] to perform the work;

(3) [name of owner] knew or should have known that the work required additional [time/compensation];

(4) [name of contractor] performed the work; and

(5) the work added to [name of contractor]'s [time/costs].

References

Highland Const. Co. v. Union Pacific R. Co., 683 P.2d 1042 (Utah 1984).
Thorn Const. Co., Inc. v. Utah Dept. of Transp., 598 P.2d 365 (Utah 1979).
Richards Contracting Co. v. Fullmer Bros., 417 P.2d 755 (Utah 1966).
Campbell Bldg. Co. v. State Road Commission, 70 P.2d 857 (Utah 1937).
Hoth v. White, 799 P.2d 213 (Utah App. 1990).
Brixen & Christopher, Architects v. Elton, 777 P.2d 1039 (Utah App. 1989).
CV2215 Additional time or compensation for extra work.

In determining the amount of additional [time/compensation] to be awarded for extra work, [name of contractor] is entitled to the amount agreed to or, if there was no agreement, to a reasonable amount.

References

Allen-Howe Specialties Corp. v. U. S. Const., Inc., 611 P.2d 705 (Utah 1980).
Campbell Bldg. Co. v. State Road Commission, 70 P.2d 857 (Utah 1937).
Wilson v. Salt Lake City, 52 Utah 506, 174 P. 847 (Utah 1918).
Salt Lake City v. Smith, 104 F. 457 (C.A.8 Dist. Utah 1900).
CV2216 Waiver of written change notice requirement.

The contract requires that change notices be made in writing. [Name of contractor] claims that [name of owner] waived the right to require written notice of contract changes. To succeed on this claim, [name of contractor] must prove that [name of owner], by words or by conduct:

(1) understood that the work performed by [name of contractor] was extra work; and

(2) agreed or acknowledged that this extra work would require a change to the contract [time/compensation].

References

Darrell J. Didericksen & Sons, Inc. v. Magna Water and Sewer Imp. Dist., 613 P.2d 1116 (Utah 1980).
Campbell Bldg. Co. v. State Road Commission, 70 P.2d 857 (Utah 1937).
Uhrhahn Const. & Design, Inc. v. Hopkins, 179 P.3d 808 (Utah App. 2008).
CV2217 "Waiver" defined.

"Waiver" means intentionally giving up a known right. To decide whether a party has waived a contract right, you must determine that all of the following have been proved:

(1) a party has a contract right;

(2) the party knew of the right; and

(3) the party intended to give up that right.

The intent to give up a right may be express or implied, and may be determined by considering all relevant circumstances.

References

United Park City Mines Co. v. Stichting Mayflower Mountain Fonds, 140 P.3d 1200 (Utah 2006).
Soter's Inc. v. Deseret Federal Sav. & Loan Ass'n, 857 P.2d 935 (Utah 1993).
CV2218 Claim for extra work due to site conditions different from contract terms (Type 1 differing site condition).

[Name of contractor] claims additional [time/compensation] for extra work caused by actual site conditions different from those described in the contract documents. To succeed on this claim, [name of contractor] must prove that:

(1) the contract documents describe certain site conditions;

(2) [name of contractor] reasonably relied on the description;

(3) [the actual site conditions were different from those described; and

(4) the different site conditions added to [name of contractor]'s [time/costs].

References

Jack B. Parson Const. Co. v. State, 725 P.2d 614 (Utah 1986).
Thorn Const. Co., Inc. v. Utah Dept. of Transp., 598 P.2d 365 (Utah 1979).
L. A. Young Sons Construction Co. v. County of Tooele, 575 P.2d 1034 (Utah 1978).
Frontier Foundations, Inc. v. Layton Const. Co., Inc., 818 P.2d 1040 (Utah App. 1991).
CV2219 Claim for extra work due to unusual site conditions unknown to the parties. (Type 2 differing site condition).

[Name of contractor] claims additional [time/compensation] for extra work caused by site conditions that were unknown to the parties. To succeed on this claim, [name of contractor] must prove that:

(1) there were important differences between the actual site conditions and those usually encountered; and

(2) the different site conditions added to [name of contractor]'s [time/costs].

References

Youngdale & Sons Const. Co., Inc. v. U.S., 27 Fed. Cl. 516 (1993).
Servidone Const. Corp. v. U.S., 19 Cl. Ct. 346 (1990).
Bruner and O'Connor On Construction Law sect. 14:53 (2002).
CV2220 Cardinal changes.

[Name of contractor] claims that [he] should be paid more than the contract amount because of a cardinal change(s). A cardinal change is a change that substantially alters the type of work described by the original contract. To succeed on this claim, [name of contractor] must prove that:

(1) the change(s) were substantially different from the work described in the original contract;

(2) the change(s), were not anticipated under the contract; and

(3) the parties acted as if the original contract no longer applied.

References

Highland Const. Co. v. Union Pacific R. Co., 683 P. 2d 1042 (Utah 1984).
Allen-Howe Specialties Corp. v. U. S. Const., Inc., 611 P.2d 705 (Utah 1980).
Wilson v. Salt Lake City, 174 P. 847 (Utah 1918).
Wunderlich Contracting Co. v. U.S. ex re Reischel & Cottrell, 240 F.2d 201 (C.A.10 Dist. Utah 1957).
Salt Lake City v. Smith, 104 F. 457 (C.A.8 Dist. Utah 1900).
Bruner & O'Connor on Construction Law, sect. 4:13-16.

Committee Notes

Because a cardinal change scenario involves abandonment of the contract, contractual remedies are generally inadequate; therefore, the proper remedy for recovery is equitable and would fall under the doctrine of unjust enrichment.
CV2221 Implied contract or unjust enrichment.

[Name of contractor] claims additional [time/compensation] for extra work even though the contract does not provide for it. To succeed on this claim, [name of contractor] must prove that:

(1) [name of owner] requested [name of contractor] to perform extra work; and

(2) [name of contractor] expected additional [time/compensation] for the extra work;

(3) [name of owner] knew or should have known that [name of contractor] expected additional [time/compensation];

(4) [name of contractor] performed the extra work that benefited [name of owner]; and

(5) it would be unjust for [name of owner] to benefit from the extra work without providing [name of contractor] additional [time/compensation].

References

E&M Sales West, Inc., v. Bechtel Jacobs Company, LLC, 2009 UT App 299
Uhrhahn Const. & Design, Inc. v. Hopkins, 179 P.3d 808 (Utah App. 2008).
Gary Porter Const. v. Fox Const., Inc., 101 P3d 371 (Utah App. 2004).
ProMax Development Corp. v. Mattson, 943 P2d 247 (Utah App. 1997).
Davies v. Olson, 746 P2d 264 (Utah App. 1987).
CV2222 Contractor's claim for time. Delay not caused by the contractor.

[Name of contractor] claims [he] was entitled to more time to perform the work because of an excusable delay. To succeed on this claim, [name of contractor] must prove that the events causing the delay:

(1) were beyond [name of contractor]'s control;

(2) were not reasonably foreseeable by [name of contractor] at the time the contract was made; and

(3) prevented [name of contractor] from meeting the contract deadline.

References

Higgins v. City of Fillmore, 639 P.2d 192, 193 (Utah 1981).
Rapp v. Mountain States Telephone and Telegraph Company, 606 P.2d 1189 (Utah 1980).
Steenberg Construction Co. v. Prepakt Concrete Co., 381 F.2d 768 (10th Cir. 1967).
S. Stein, Construction Law sect. 6.09 (1999).
Bruner & O'Connor on Construction Law, sect. 15:42 (2002).
CJS Contracts sect. 391.
CJS Contracts sect. 580.
CV2223 Contractor's claim for damages for delay caused by owner.

[Name of contractor] claims [he] was entitled to additional time and money to perform the work. To succeed on this claim, [name of contractor] must prove that the events resulting in the delay:

(1) were caused by [name of owner] and not [name of contractor];

(2) were within [name of owner]'s control;

(3) were reasonably foreseeable by [name of owner]; and

(4) required [name of contractor] to incur additional expenses and time to perform the work.

References

Higgins v. City of Fillmore, 639 P.2d 192, 193 (Utah 1981).
Rapp v. Mountain States Telephone and Telegraph Company, 606 P.2d 1189 (Utah 1980).
Allen-Howe Specialties Corporation v. U.S. Construction, Inc., 611 P.2d 705, 709 (Utah 1980).
Burgess Constr. Co. v. M. Morrin & Son Co., Inc., 526 F.2d 108 (10th Cir. 1975).
Steenberg Construction Co. v. Prepakt Concrete Co., 381 F.2d 768 (10th Cir. 1967).
Corporation of President of Church of Jesus Christ of Latter-Day Saints v. Hartford Accident & Indemnity Co., 95 P.2d 736, 747 (Utah 1939).
S. Stein, Construction Law sect. 6.11 (1999).
Bruner & O'Connor on Construction Law, sect. 15:50 (2002).
CJS Contracts sect. 580
CV2224 Owner's claim for damages for delay caused by contractor.

[Name of owner] claims [he] is entitled to damages caused by [name of contractor]'s delay. To succeed on this claim, [name of owner] must prove that the events resulting in the delay:

(1) were caused by [name of contractor] and not [name of owner];

(2) were within [name of contractor]'s control;

(3) were reasonably foreseeable by [name of contractor]; and

(4) required [name of owner] to incur additional expenses.

References

Rapp v. Mountain States Telephone and Telegraph Company, 606 P.2d 1189 (Utah 1980).
Corporation of President of Church of Jesus Christ of Latter-Day Saints v. Hartford Accident & Indemnity Co., 95 P.2d 736, 747 (Utah 1939).
Campbell Building Co. v. State Road Commission, 70 P.2nd 857 (Utah1937).
Bruner & O'Connor on Construction Law, sect. 15:30 (2002).

Committee Notes

The owner's damages for contractor's delay should be applied if the owner is not making a claim for liquidated damages. See Instruction CV2237, Liquidated damages.

If a liquidated damages clause is not at issue, the owner is required to prove the same items that a contractor is required to prove to be entitled to a claim for delay damages. There are no reported Utah cases dealing with the owner's entitlement to delay damages caused by the contractor where a liquidation clause is not at issue. The cases cited below deal with cases where the contractor's claims for delay damages have been denied, and the owner has been absolved from paying any damages.

CV2225 Concurrent delay.

If you find that both parties contributed to the delay, then neither party is entitled to recover damages as a result of the delay.

References

Higgins v. City of Fillmore, 639 P.2d 192, 194 n.2 (Utah 1981).
S. Stein, Construction Law sect. 6.10[3] (1999).
Bruner & O'Connor on Construction Law, sect. 15:67 (2002).
CV2226 Damages for delay.

Name of contractor] claims damages for delays. The contract provides that [name of contractor] is entitled to extra time to complete the work but is not entitled to recover damages caused by the delay. However, there are circumstances in which [name of contractor] may recover damages for delay regardless of the contract.

To succeed on this claim, [name of contractor] must prove

[(1) that [name of owner/owner's agent] caused the delay by direct interference, active interference, or willful interference with [name of contractor]'s work.]

[(2) the delay was not reasonably foreseeable at the time the parties entered into the contract and the delay was excessive and unreasonable.]

References

Allen-Howe Specialties Corp. v. U.S. Const., Inc., 611 P.2d 705 (Utah 1980).
W. Eng'rs, Inc. v. State By and Through Rd. Comm'n, 437 P.2d 216 (Utah 1968).
Acret, James, Construction Litigation Handbook. sect. 7.8.

Committee Notes

The judge should instruct the jury only on those elements, (1) or (2), for which there is evidence.
CV2227 Right to suspend work due to non-payment.

[Name of contractor] claims [he] suspended the work because of non-payment. To succeed on this claim, [name of contractor] must prove that:

(1) [name of owner] failed to make required progress payment(s);

(2) [name of owner]'s failure to make the payment(s) was an important breach of the contract; and

(3) [name of owner] had no reasonable excuse to withhold the payment(s).

References

Darrell J. Didericksen & Sons v. Magna Water & Sewer Improv. Dist., 613 P.2d 1116, 1119 (Utah 1980).

Committee Notes

Instruction can be used as a cause of action or an affirmative defense.

CV2228 Right to suspend work due to interference.

[Name of contractor] claims that [he] suspended the work because of interference by [name of owner]. To succeed on this claim, [name of contractor] must prove that:

(1) [name of owner] or [events within [name of owner's] control] unreasonably interfered with [name of contractor]'s performance of [his] work; and

(2) the interference was for an unreasonable period of time.

References

Bruner & O'Connor Construction Law sect.sect. 15:83-84.

Committee Notes

Instruction can be used as a cause of action or an affirmative defense.

CV2229 Contractor's liability for breach of warranty of workmanship and habitability.

[Name of owner] claims that the new residence [he] purchased from [name of builder/developer] is defective and [name of builder/developer] has breached the implied warranty of workmanship and habitability. To succeed on this claim [name of owner] must prove that:

(1) [he] purchased a new residence from [name of builder/developer];

(2) the residence contained a defect that first became noticeable after [name of owner] purchased the residence;

(3) the defect was caused by improper design, material, or workmanship; and

(4) the defect made the residence unsafe or unfit for human habitation.

References

Davencourt v. Davencourt, 2009 UT 65.

Committee Notes

This instruction is appropriate only if the owner/buyer has shown privity of contract between the owner/buyer and the developer/builder who sold the new residence. See Davencourt at ¶57.

CV2230 Contractor's liability for defective work.

[Name of owner] claims that [he] was damaged by [name of contractor]'s [defective/incomplete] work. To succeed on this claim, [name of owner] must prove that:

(1) [Name of contractor] did not comply with the [contract requirements] [plans and specifications] [requirements of the building code] [industry standards]; and

(2) [name of contractor]'s [defective/incomplete] work was a cause of [name of owner]'s damages.

References

Benson v. Ames, 604 P.2d 927 (Utah 1979).
F.C. Stangl, III v. Todd, 554 P.2d 1316 (Utah 1976).
Rex T. Fuhriman, Inc. v. Jarrell, 445 P.2d 136 (Utah 1968).
Trujillo v. Utah Dept. of Transp., 986 P.2d 752 (Utah Ct. App. 1999).

Committee Notes

Instruction CV2230 describes the elements of the claim for defective or incomplete work. Instruction CV2231 describes the usual measure of damages. Instruction CV2232 describes the alternative measure of damages, if contractor proves that the usual measure of damages would result in unreasonable economic waste.

CV2231 Damages for contractor's defective work.

If you find that [name of owner] was damaged by [name of contractor]'s [defective/incomplete] work, [name of owner] is entitled to recover as damages the amount of money that will reasonably compensate [name of owner] for the harm resulting from the defective improvements. The measure of damages will be either (1) the cost of repair, or (2) a loss of market value measure of damages.

"Repair" Measure of Damages: If repairing the improvements is possible and would not be unreasonably wasteful, you must award [name of plaintiff] the reasonable cost to repair the improvements to the condition they would have been in if [name of defendant] had not breached the contract. This is called the "repair" measure of damages.

"Loss in Market Value" Measure of Damages: If repairing the improvements is not possible, or if [name of defendant] proves that the cost to repair the improvements is unreasonably wasteful then you cannot award [name of plaintiff] the "repair" measure of damages. You must instead award [name of plaintiff] damages equal to the difference between the fair market value that the improvements would have had absent defendant's breach and the fair market value of the improvements as received. This is called the "loss in market value" measure of damages. The repair is unreasonably wasteful if the cost of repair is sufficiently more than the loss in fair market value of the improvements caused by [name of contractor]'s [defective/incomplete] work, so that a reasonable person would not make the repair under the circumstances. If you find that a repair is unreasonably wasteful, then you should award to [name of plaintiff] the "loss in the market value" measure of damages.

References

Western Land Equities, Inc. v. City of Logan, 617 P.2d 388, 395 (Utah 1980) (holding that economic waste results from expenditures of construction costs without benefit to public or private property owners).
Winsness v. M.J. Conoco Distributors, Inc., 593 P.2d 1303 (Utah 1979).
F.C. Stangl, III v. Todd, 554 P.2d 1316 (Utah 1976).
Rex T. Fuhriman, Inc. v. Jarrell, 445 P.2d 136 (Utah 1968).

Committee Notes

It is appropriate to give Instruction CV2010, "Fair market value" defined, with this instruction.

In Stangl, the Supreme Court puts the burden of showing economic waste on the breaching party: "The contract breaker should pay the cost of construction and completion in accordance with his contract, unless he proves, affirmatively and convincingly, such construction and completion would involve unreasonable economic waste." F.C. Stangl, III v. Todd, 554 P.2d 1316,1320, citing 5 Corbin on Contracts, §1089 (Utah 1976). Jurisdictions differ on who has the burden of proof. See Ludington, 41 A.L.R.4th 131, ¶(9).

Although the Stangl case uses the phrase "proves, affirmatively and convincingly," requiring clear and convincing evidence of unreasonable economic waste seems not to be supported by the Restatement, but the court may need to decide the matter.

What is the standard for determining unreasonable economic waste and how unreasonable the economic waste has to be before diminution in price becomes the correct measure of damages is not revealed in Stangl or the Restatement. See Ludington, 41 A.L.R.4th 131, ¶(2)(f).

Committee Amended

12/2013
CV2233 Termination for cause.

[Name of owner] claims [he] had the right to terminate the contract because [name of contractor] breached the contract. To succeed on this claim, [name of owner] must prove that [he]:

(1) gave timely and adequate notice of the claimed breach to [name of contractor];

(2) gave [name of contractor] reasonable time to correct the breach [as required by the contract];

(3) had not breached the contract in any important way at the time of termination; and

(4) [name of contractor] had not already substantially performed the contract.

References

S. Stein, Construction Law sect. 4.13 at 4-75, 4-97-98.
ABA Model Jury Instructions: Construction Litigation sect. 6.18.

Committee Notes

There is no Utah law on this topic. This instruction reflects the majority rule in the country.

CV2234 Termination for convenience.

[Name of owner] claims [he] had the right to terminate the contract for [his] convenience. I have found that the contract gives [name of owner] the right to terminate the contract for [his] convenience. To succeed on this claim, [name of owner] must further prove that:

(1) [name of owner] did not breach the contract in any important way before [he] gave [name of contractor] notice of the termination for convenience; and

(2) [name of owner] exercised [his] right to terminate the contract for convenience in good faith.

References

Encon Utah, LLC v. Flour Ames Kraemer, LLC, 210 P.3d 263 (Utah 2009)
Morrison Knudsen Corp. v. Fireman's Fund Insurance Co., 175 F.3d 1221 (10th Cir. 1999)
EDO Corp. v. Beech Aircraft Corp., 911 F.2d 1447, 1453 n. 6 (10th Cir. 1990)
Bruner & O'Connor Construction Law sect.sect. 18:45-47

Committee Notes

If the owner is given the unilateral right to terminate the contract for its convenience and not for cause arising from the contractor's breach, there is a perceived concern among the courts that the contract may create an unenforceable and illusory promise lacking consideration due to the absence of mutuality. To address this concern courts throughout the country have determined that the owner's right to terminate the contract for convenience should be done in good faith. The general view is that the owner has an implied duty of good faith and fair dealing when exercising its rights under a termination for convenience clause. See Bruner & O'Connor Construction Law §§ 18:47

CV2235 Damages for termination for convenience.

If you find that [name of owner] terminated the contract for convenience in good faith, [name of contractor] is entitled to the damages defined in the contract. You should award [name of contractor] the following damages:

(1) reasonable out of pocket costs for the work performed;

(2) reasonable overhead for the work performed;

(3) reasonable profit for the costs and overhead;

(4) reasonable demobilization costs;

(5) other reasonable costs relating to the termination for convenience.

References

Encon Utah, LLC v. Flour Ames Kraemer, LLC, 210 P.3d 263 (Utah 2009)
Bruner & O'Connor Construction Law sect.5:272
12 ALR Fed. 2d 551

Committee Notes

If the contract expressly excludes any item of damages, do not include it when instructing the jury. If the contract provides for additional damages, include these additional categories when instructing the jury.

CV2236 Damages for owner's breach that prevents contractor's performance.

If you find that [name of owner] breached the contract and that the breach prevented [name of contractor] from completing the project, then you should award as damages the amount that [name of contractor] would have received for finishing the project, minus the reasonable expense [he] would have spent to complete the project.

References

Flynn v. Schocker Constr, Co., 459 P.2d 433 (Utah 1969).
Flynn v. W.P. Harlin Constr. Co., 509 P.2d 356 (Utah 1973).
CV2237 Liquidated damages.

[Name of owner] seeks to recover the damages stated in the contract for failing to complete the project on time. You must award the damages stated in the contract if you find that, at the time the parties entered into the contract:

(1) the agreed-upon damages was a reasonable forecast of the damages [name of owner] would suffer as a result of a delay, and

(2) the actual damages that would arise from the delay were difficult to estimate accurately.

References

Reliance Ins. Co. v. Utah Dep't of Transportation, 858 P.2d 1363, 1366-67 (Utah 1993)
Woodhaven Apartments v. Washington, 942 P.2d 918, 921 (Utah 1997)
Allen v. Kingdon, 723 P. 2d 394, 397 (Utah 1986)
Soffe v. Ridd, 659 P.2d 1082, 1084 (Utah 1983)
Restatement of Contracts sect.339 (1932)
CV2238 Accord and satisfaction.

[Name of owner] claims that [he] did not have to perform [describe old contract obligations] because [he] and [name of contractor] had a disagreement about the contract that they resolved by entering into a new contract that replaced the first contract. [Name of owner] claims that the new contract required [describe the new obligation(s)] and that [he] has fully performed or is performing these obligations.

To succeed on this claim, [name of owner] must prove that:

(1) [name of contractor] and [name of owner] had a dispute about the original contract that they resolved by entering into a new contract; and

(2) [name of owner] fully performed or is performing [his] obligations under the new contract.

If you decide that [name of owner] has proved both of these things, then [name of owner] is released from performing [describe obligations] under the original contract.

References

Cannon v. Stevens School of Business, Inc., 560 P.2d 1383 (Utah 1977).
Stratton v. West States Constr., 440 P.2d 117 (Utah 1968).
Restatement (Second) of Contracts sect. 281(1981).
See Instruction CV2120, Accord and satisfaction.
CV2239 Impossibility.

[Name of contractor] claims that [he] is excused from performing the contract because [insert description of circumstances] made the main purpose of the contract impossible to perform. To succeed on this claim, [name of contractor] must prove that:

(1) the main purpose of the contract is no longer possible;

(2) [name of contractor] did not create the events that made the main purpose impossible, and they were beyond [his] control; and

(3) the events that made the main purpose impossible were not reasonably foreseeable by either party at the time the contract was made.

References

Holmgren v. Utah-Idaho Sugar Co., 582 P.2d 856, 861 (Utah 1978).
Quagliana v. Exquisite Home Builders, Inc., 538 P.2d 301, 305-06 (Utah 1975).
Western Properties v. Southern Utah Aviation, Inc., 776 P.2d 656, 658-59 (Utah Ct. App. 1989).
See Instruction CV2125, Impossibility/Impracticability.
CV2240 Frustration of purpose.

[Name of owner] claims that [his] performance under the contract is excused because of the following circumstances:

[Insert description of circumstances which frustrated that purpose.]

To determine if [name of owner] is excused from performance under the contract, you must decide:

(1) the original purpose of the contract contemplated by the parties;

(2) whether the circumstances just described are a supervening event, unforeseen at the time the contract was entered into;

(3) whether the circumstances occurred through no fault of [name of owner]; and

(4) whether the new circumstances have made the purpose of the contract useless.

References

Currently there is no Utah law on frustration of purpose in a construction context.
See Instruction CV2126, Frustration of purpose.
CV2241 Mutual mistake.

[Name of contractor] claims that the contract is not enforceable because both parties were mistaken about [describe mutually mistaken important fact].

To succeed on this claim, [name of name of contractor] must prove the following by clear and convincing evidence:

(1) that at the time the contract was entered into both [name of owner] and [name of contractor] were mistaken about these facts, and

(2) that these facts were a basic assumption or an important fact upon which they based their bargain.

References

Deep Creek Ranch, LLC v. Utah State Armory Bd., 2008 UT 3, para.para.17-18, 178 P.3d 886.
Arnell v. Salt Lake County Bd. of Adjustment, 2005 UT App 165, para.para. 41-42.
Mostrong v. Jackson, 866 P.2d 573, 579-80 (Utah Ct. App. 1993).
Mooney v. BR & Associates, 746 P.2d 1174, 1178 (Utah Ct. App. 1987).
See Instruction CV2129, Mutual mistake.
CV2242 Unilateral mistake.

[Name of contractor] claims the contract is not enforceable because [he] was mistaken about [insert description of unilateral mistake of fact].

To succeed on this claim, [name of contractor] must prove the following by clear and convincing evidence:

(1) [name of contractor] was mistaken about [insert description of mistake];

(2) [his] mistake has such serious consequences that to enforce the contract would be unconscionable;

(3) the matter about which the mistake was made related to an important feature of the contract;

(4) the mistake occurred even though [name of defendant] made a reasonable effort to understand the circumstances about which he was mistaken; and

(5) [name of owner] can be put back in the same position [he] was in before the contract, losing only the benefit of the bargain.

References

John Call Engineering, Inc. v. Manti City Corp., 743 P.2d 1205 (Utah 1987).
Mostrong v. Jackson, 866 P.2d 573 (Utah Ct. App. 1993).
Grahn v. Gregory, 800 P.2d 320 (Utah Ct. App. 1990).
See Instruction CV2130, Unilateral mistake.
See Instruction CV2127, Substantive unconscionability.
CV2243 Mitigation of damages.

[Name of contractor] had a duty to mitigate, that is, to minimize or avoid, the damages caused by [the breach of contract]. [Name of contractor] may not recover damages that [he] could have avoided without humiliation or unreasonable risk or burden. Likewise, [name of contractor] may not recover the damages for losses that were caused by or made worse by [his] own action or inaction.

[Name of contractor] has a right to recover damages if [he] has made a reasonable but unsuccessful effort to avoid loss.

[Name of contractor] had no obligation to mitigate [his] damages by taking action which [name of owner] refused to take. If [name of owner] had the primary responsibility to perform [list the act] and had the same opportunity to perform [the act] and the same knowledge of the consequences as [name of contractor], [name of owner] cannot succeed in a claim that [name of contractor] failed to perform [the act].

References

Mahmood v. Ross (In re Estate of Ross), 1999 UT 104, para. 31.
Angelos v. First Interstate Bank of Utah, 671 P.2d 772 (Utah 1983).
Restatement (Second) of Contracts sect. 350.
See Instruction CV2139, Mitigation and avoidance.

Committee Notes

If dealing with a corporation or other business entity, it may be appropriate to omit "humiliation."