What is the test for a claim against a contractor who has failed to complete the work?

Alberta, Canada


The following excerpt is from Marble Shop Ltd. v. Maguire's 5th Ave. Floors Inc., 2000 ABPC 92 (CanLII):

The plaintiff cites and relies upon the decision in Hoenig v. Isaacs, [1952] 2 All E.R. 176. The plaintiff cites the following reasons of Denning, L.J. found at pp. 180-1: In determining this issue the first question is whether, on the true construction of the contract, entire performance was a condition precedent to payment. It was a lump sum contract, but that does not mean the entire performance was a condition precedent to payment. When a contract provides for a specific sum to be paid on completion of specified work, the courts lean against a construction of the contract which would deprive the contractor of any payment at all simply because there are some defects or omissions. The promise to complete the work is, therefore, construed as a term of the contract, but not as a condition. It is not every breach of that term which absolves the employer from his promise to pay the price, but only a breach which goes to the root of the contract, such as an abandonment of the work when it is only half done. Unless the breach does go to the root of the matter, the employer cannot resist payment of the price. He must pay it and bring a cross-claim for the defects and omissions, or, alternately, set them up in diminution of the price.

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