In contrast, the contract may be worded in such a way as to allow payment to be made in stages. A typical example is the use of the phrase ‘net cash as the work proceeds and balance on completion’. The effect of this is to render the builder’s performance obligation severable rather than entire. In Hoenig v Isaacs, the plaintiff was employed by the defendant to decorate and furnish a flat at a fixed cost of £750. The work was completed, albeit subject to some defects which would cost £55 to rectify. The defendant moved into the flat but refused to pay the balance outstanding under the contract. The contract provided for payment of ‘net cash as the work proceeds and balance on completion’, so that the defendant had already paid £350 and the plaintiff now sought to recover the remaining £400. The Court of Appeal held that the defendant had not refused to accept the work with the result that he only had an action for damages for the defective work: Hoenig v Isaacs [1952] 2 All ER 176, CA, p 177

doi:10.4324/9781843141518-211

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In contrast, the contract may be worded in such a way as to allow payment to be made in stages. A typical example is the use of the phrase ‘net cash as the work proceeds and balance on completion’. The effect of this is to render the builder’s performance obligation severable rather than entire. In Hoenig v Isaacs, the plaintiff was employed by the defendant to decorate and furnish a flat at a fixed cost of £750. The work was completed, albeit subject to some defects which would cost £55 to rectify. The defendant moved into the flat but refused to pay the balance outstanding under the contract. The contract provided for payment of ‘net cash as the work proceeds and balance on completion’, so that the defendant had already paid £350 and the plaintiff now sought to recover the remaining £400. The Court of Appeal held that the defendant had not refused to accept the work with the result that he only had an action for damages for the defective work: Hoenig v Isaacs [1952] 2 All ER 176, CA, p 177

ABSTRACT

Hoenig v Isaacs [1952] 2 All ER 176, CA, p 177 Somervell LJ: Each case turns on the construction of the contract. In Cutter v Powell, the condition for the promissory note sued on was that the sailor should proceed to continue and do his duty as second mate in the ship from Jamaica to the port of Liverpool. The sailor died before the ship reached Liverpool and it was held his estate could not recover either on the contract or on a quantum meruit. It clearly decided that his continuing as mate during the whole voyage was a condition precedent to payment. It did not decide that if he had completed the main purpose of the contract, namely, serving as mate for the whole voyage, the defendant could have repudiated his liability by establishing that in the course of the voyage the sailor had, possibly through inadvertence, failed on some occasion in his duty as mate whereby some damage had been caused. In these circumstances, the court might have applied the principle applied to ordinary contracts for freight. The shipowner can normally recover nothing unless the goods are carried to their agreed destination. On the other hand, if this is done, his claim is not defeated by the fact that some damage has been done to the goods in transit which has resulted from a breach of the contract ...