Sumpter v Hedges [1898]

Sumpter v Hedges [1898] 1 QB 673 is a notable English contract law case that delves into the aspects of substantial performance of a contract and restitution for unjust enrichment.

Mr Sumpter, a builder, entered into a contract with Mr Hedges to construct two houses and stables for a lump sum of £560. After completing work valued at £333, Sumpter informed Hedges that he was ceasing the construction due to a lack of funds. Although substantial payments had already been made to Sumpter, he abandoned the project, leaving unfinished structures on Hedges' land. Hedges proceeded to complete the construction using the materials left behind by Sumpter. Subsequently, Sumpter sued for the outstanding payment.

Bruce J, in the initial judgment, found that Sumpter had abandoned the contract and was only entitled to receive money for the value of the materials but nothing for the work. The Court of Appeal upheld the decision, emphasising that Sumpter had abandoned the building work, leaving Hedges with no choice but to complete it.

The court ruled that Hedges had to pay for the building materials used but was not obliged to reimburse Sumpter for the incomplete structures. The leading judgment by AL Smith LJ clarified that in cases where there is a contract for a lump sum, the price cannot be recovered until the work is completed. It was further stated that for Sumpter to claim on a quantum meruit (reasonable value for the work done), evidence of a new contract to pay for the work already done must be present.

Chitty LJ concurred with the decision, emphasising that an express contract prevails, and unless there is evidence of a new contract, the original terms stand. He cited previous cases, including Cutter v Powell [1795], to support the view that there must be some evidence of a new contract for a builder to recover on a quantum meruit.

Collins LJ agreed with the finding, emphasising that the circumstances did not provide an option for Hedges to choose whether to benefit from the work done or not. He clarified that the mere fact of a defendant being in possession of completed work does not automatically imply a new contract, and the circumstances in this case did not warrant such an inference.

This case underscores the importance of contractual performance and the need for clear evidence of a new contract for recovery in cases of abandonment. The decision aligns with the legal principle that a party cannot recover the contract price until the work is substantially completed or there is evidence of a fresh agreement.
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