Proper Measure of Damages from Defaulting Contractor is Cost of Completion or Necessary Repairs

525 Main St. Corp. v. Eagle Roofing Co., 168 A.2d 33, 34 N.J. 251 (1961)

In this case, the plaintiff property owner, contracted with the defendant for repairs to his roof and a five-year guarantee against leaks with a promise to repair.  During the five years, the defendant disputed the scope of his responsibility and stopped performing repairs.  The trial court found in favor of the plaintiff, concluding that the defendant had breached, but awarded nominal damages.  The plaintiff appealed on the issue of damages.

The defendant argued that the damages should properly be calculated as the difference in value of the entire structure with the defective roof and the value of the building as if the contract had been fully performed.  The court disagreed and found that in the construction context, the cost of repairs or the cost of replacement is the appropriate measure of damages and not a measurement made with reference to the value of the building as whole.