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Jack R.
Jack R., Attorney
Category: Legal
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Experience:  OH/TX Practicing Attorney focusing on Family Law, Foreclosure, Landlord-Tenant Issues.
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Contract Law Question I was researching recently and came

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Contract Law Question

I was researching recently and came across a chunk of info that discussed when contracts are unable to be fulfilled as a result of something beyond/out of the control of one of the parties, that which was an unknown concern at the time of entering into agreement.

Please help me recall the term and perhaps a site that discusses the concept in detail, where examples are given for the purpose of clarity.

Thank you for choosing just answer:

 

I believe the term you are looking for is "failure of consideration". Failure of consideration happens when, because of some supervening cause after an agreement is reached, the promised performance fails.

 

There are also other contract performance defenses such as "impossibility" and "impracticabilty".

 

Defense of Impracticability http://www.legalmatch.com/law-library/article/impracticability-lawyers.html

 

Most of these concepts are articulated in case law.

 

 

 

Defense of Impossibility http://www.legalmatch.com/law-library/article/breach-of-contract-defense-of-impossibility.html

 

These latter 2 deal with situation where performance has been rendered impossible by the party needing to perform in the case of impossibility, and and failure of anyone to be able to perform in the case of impracticability.

 

Failure of Consideration: http://causeofactionelements.blogspot.com/2011/06/lack-and-failure-of-consideration.html

 

There is also a contract formation defense referred to as "mutual mistake" which revolves around errors at time of contracting . The above deal with contract performance defenses.

 

Let me know of there is further information you require.

 

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This communication does not establish an attorney-client relationship.Information provided here is not legal advice. Rather it is simply general information.

Jack R. and 7 other Legal Specialists are ready to help you
Customer: replied 3 years ago.

My specific contract concern is with a contractor/home repair, where the contract has me (the homeowner/insurance carrying party) agree to direct our insurance carrier to pay the contractor direct, as well as name them on all drafts relevant to this loss (for which they were hired to mitigate and restore).


 


I did what I agreed to do. The insurance carrier was ordered by my mortgage company, the asset holder, to pay them (the mortgager) instead of releasing funds to me, and refused to allow the insurance carrier to name the Contractor (that we hired) to be named period.


 


Would this "failure" of mine, which I was unable to affect otherwise, most likely fall under "impossibility"?

What have you done to get the funds back from your mortgage company ?. Usually the mortgage company will release the funds back to you once the repairs are complete and they have inspected the work. Call the mortgage company up and schedule the inspection. This is an administrative timing problem. Your contractor fulfilled his obligation under the contract. It is up to you to pay him. You need to fulfill you part of the contract which is securing payment for the work. As an aside the behavior of the mortgage company was entirely predicable and not an unforeseen event. I don't see that you have any defense here.

 

If you found this answer useful please press the appropriate quality of service button of 3 or greater. This is needed so I can get credit for my answer. If you have follow up questions please ask.

This communication does not establish an attorney-client relationship.Information provided here is not legal advice. Rather it is simply general information.

Jack R. and 7 other Legal Specialists are ready to help you
Customer: replied 3 years ago.

In our case, the contractor did not complete the work; they abandoned the job twice.


 


We commenced the work ourselves, with our labor. I have paid a few professionals here and there when necessary, mostly out of pocket. The insurance award has been distributed in part to us by the mortgage company, but they retain more than 1/3 still, as we are not restored/rebuilt yet.


 


This contractor legitimately did about $2500 of work, after physical damages they caused to our property are deducted (for which I have proof and testimony). We offered to settle for this and they refused, stating they wanted $10k+ because that's what the insurance company paid us, they believe.


 


There remains no invoice. There only exists an estimate the contractor prepared, which we contested as accurate (as it included much work that either had yet to be performed or was performed by me personally). The contractor acknowledged the errors, asked us to point them all out, said they'd redraft. Yet, as soon as I began to point out the errors, they withdrew communication. When I pressed, including asking for their alleged notes and documentation, and images, to help me determine where the inconsistencies might lie - to reach a viable conclusion and invoice, I was refused until I tossed money at them as "good faith", to the tune of about 1/2 their estimate. This amount was greater than I believed was owed them for all the work they performed, and so I refused and indicated I'd pay them when we had an invoice, perhaps even an accurate one.

Even now, they refuse to respond to my questions presented to their counsel as to whether we have an agreed upon amount legitimately owed. I spent a week (60 hours) going through all my notes, images, memories, and their errant estimate and finally came up with what I believe is an accurate representation of their work. I presented it to them for acknowledgment and consideration and received no response. I then asked whether they'd like to address my conclusions, and received no response.


 


They'd have been paid for the real work they did, had they provided me an invoice for it. They're after the entire claim the insurance awarded, just because they want it. Thankfully, my mortgage company has the wisdom and likely experience to know that contractors like this exist, and therefore they are in control of the insurance award, so maybe the house might actually get repaired.

Based on your comments the botXXXXX XXXXXne is that you original contractor breached the contract due to non performance. They are only owed for the work they completed nothing more. When you have completed the work ask your mortgage company to come out and inspect and release the funds to YOU and to you only.

 

Secondly you should be aware that if the repairs cost you more than the original contracted amount, you may sue the original contractor for the difference.

 

If you found this answer useful please press the appropriate quality of service button of 3 or greater. This is needed so I can get credit for my answer. If you have follow up questions please ask.

 

This communication does not establish an attorney-client relationship.Information provided here is not legal advice. Rather it is simply general information.

 

 

 

 

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