The Northeast Independent School District in Bexar County, Texas, hired STR Constructors, Ltd., to renovate a middle school. STR subcontracted the tile work in the school’s kitchen to Newman Tile, Inc. (NTI). The project had already fallen behind schedule. As a result, STR allowed other workers to walk over and damage the newly installed tile before it had cured, forcing NTI to constantly redo its work. Despite NTI’s requests for payment, STR remitted only half the amount due under their contract. When the school district refused to accept the kitchen, including the tile work, STR told NTI to quickly make the repairs. A week later, STR terminated their contract. Did STR breach the contract with NTI?

Upon entering a contract, parties obtain both to receive something and to do something or refrain from doing something.

2. If a party enters a contract, what is the most common way for that party to discharge its duties under the contract?

3. A breach of contract occurs when there is of a contractual duty.

4. If the performance is substantial, but not complete, is there a breach?

5. Substantial performance results in breach.

6. If the performance is less than substantial, is there a breach?

7. If performance is less than substantial, it is breach.

8. If the breach of one party is material, the other party discharged from performing its duties under the contract.

9. If the breach of one party is minor, the other party discharged from performing its duties under the contract.

10. In any type of breach, the nonbreaching party entitled to sue for damages.

11. In this scenario, how many contracts are there?

12. With whom did Newman contract?

13. Newman's primary duty under the contract was to .

14. STR had two duties under the contract. They were to and to .

15. Which party failed to perform its part of the contract?

16. failed to perform its duties under the contract by and by only .

17. STR's performance of duties under the contract was .

18. Did STR breach the contract?

19. STR’s breach was .

20. Were Newman’s duties under the contract discharged?

21. If Newman’s duties were discharged, then .

22. Newman sue for damages.

23. WHAT IF THE FACTS WERE DIFFERENT?

What if the tile work had proceeded as contracted and looked good, but STR refused to pay, saying it didn't meet their personal satisfaction (even though the contract didn't mention this option).

Could STR refuse to pay?

24. Whose standard must the work meet?

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STR breached the contract with Newman. A breach of contract is the nonperformance of a contractual duty. A breach is material when performance is not at least substantial. On a material breach, the nonbreaching party is excused from performance. If a breach is minor, the nonbreaching party's duty to perform can sometimes be suspended until the breach has been remedied, but the duty to perform is not entirely excused. Once a minor breach has been cured, the nonbreaching party must resume performance. Any breach—material or minor—entitles the nonbreaching party to sue for damages.

In this problem, Newman had to redo its work constantly because STR permitted its employees and the employees of other subcontractors to walk over and damage the newly installed tile. Furthermore, despite Newman’s requests for payment, STR remitted only half the amount due under the contract. Thus, Newman was deprived of at least half of the money it was owed under the contract. And STR terminated the contract, apparently wrongfully and without cause, as the tile work would have been completed and satisfactorily if STR had not allowed other workers to trample the tile before it had cured.

In the actual case on which this problem is based, when STR refused to pay Newman and then terminated the contract, the subcontractor filed a suit in a Texas state court to recover. From a jury verdict in Newman’s favor, STR appealed. A state intermediate appellate court affirmed. “The evidence presented was legally sufficient for the jury to conclude that STR materially breached the contract.”

Contract Performance, Breach, and Remedies
Contract Discharge