## Facts

- Michael Nolan (plaintiff) contracted with Whitney (defendant) to perform the mason work for the construction of two buildings.
- The agreement provided for installment payments as the work progressed.
- The final payment was due 30 days after completion, but only upon obtaining an architect’s certificate stating the buildings were satisfactorily constructed.
- Nolan finished the work in all material respects, with only “trivial defects in the plastering.”
- The architect refused to issue the required certificate of satisfactory completion.
- Because the certificate was not produced, Whitney refused to make the final payment.
- Nolan sued to recover the unpaid balance.
- The trial court (through a referee’s findings) determined Nolan had substantially performed and allowed Whitney a \$200 deduction for the minor plastering defects.
- Judgment was entered for Nolan for the final installment minus the \$200 allowance, and Whitney appealed.

## Issues

1. Whether a contractor who has substantially performed a building contract may recover the contract balance subject to an allowance for minor defects.
2. Whether a contractual condition requiring an architect’s completion certificate bars recovery when the architect unreasonably refuses to issue the certificate.

## Decision

- The Court of Appeals affirmed the judgment for Nolan.
- The court accepted the finding that Nolan’s performance was substantial and that the remaining defects were minor.
- The court approved reducing the recovery by \$200 to account for the trivial plastering defects.
- The court held that Whitney could not defeat payment solely because the architect’s certificate was not produced where the certificate was refused without proper reason.

## Legal Principles

- In building contracts, a contractor who substantially performs may recover the contract price, less a reasonable allowance for minor defects or omissions.
- A requirement that payment depends on a third party’s approval or certificate does not automatically bar recovery if the approval is withheld arbitrarily, unreasonably, or in bad faith.
- An owner may not use the nonproduction of an architect’s certificate to avoid paying for substantially completed work when the certificate was withheld without a valid basis.
- When minor defects remain after substantial completion, the usual remedy is a monetary deduction rather than forfeiture of the contract balance.

## Conclusion

Nolan v. Whitney holds that a contractor who substantially completes contracted construction work may recover the final payment with a reasonable deduction for trivial defects, and that an owner cannot rely on the absence of an architect’s certificate to withhold payment when the architect’s refusal to certify is unreasonable.


Nolan v. Whitney, 88 N.Y. 648 (1882)