## Facts

- Contractors agreed in a written contract to build a three-family house on owners’ land for \$91,000, payable in five installments, with completion due in 150 days.
- Owners made the first four scheduled payments (totaling \$67,100), withholding \$2,000 for incomplete items, leaving \$23,900 unpaid on the contract price.
- The house was substantially constructed but contained defective or incomplete items and was not completed within the 150-day period.
- Owners nonetheless took possession and used the property as a residence and rental property.
- Contractors sought the unpaid contract balance (less appropriate credits) and payment for alleged extra work outside the written contract.
- Owners disputed liability for the balance and extras and asserted setoffs for delay, defective work, and costs to complete unfinished items.
- The trial court awarded contractors \$20,015.40 plus interest, allowing some extras and some setoffs.
- On appeal, the parties conceded the \$100 “extra” for basement insulation was improper, and conceded errors in the interest rate and the end date used for interest.

## Issues

1. Whether the contractors’ incomplete, defective, and delayed performance nonetheless amounted to substantial performance permitting recovery of the contract price balance, subject to deductions, rather than limiting recovery to quantum meruit.
2. Whether the trial court properly allowed recovery for particular claimed extras outside the written contract.
3. Whether the trial court properly allowed or disallowed the owners’ claimed setoffs for delay, correction of defects, and completion of unfinished work.
4. Whether the trial court applied the correct statutory interest rate over time and the correct period for calculating interest.

## Decision

- The judgment was affirmed on substantial performance and the general approach of awarding the contract balance less credits for defects and incomplete work.
- The trial court’s determinations regarding most extras and setoffs were upheld as fact findings supported by the record.
- The award was modified to disallow the \$100 basement-insulation “extra.”
- The case was remanded to correct the interest award by applying 6% before October 1, 1979, 8% thereafter, and calculating interest through the date of judgment rather than only to the date of trial.

## Legal Principles

- A contractor who substantially performs a construction contract may recover the contract price, reduced by the reasonable cost to remedy defective work and complete unfinished items.
- Substantial performance in a building contract is a fact question; occupancy and functional use of the structure supports a finding that remaining defects did not defeat the contract’s essential purpose.
- Whether particular items are compensable “extras,” and the amount of allowable setoffs for delay or defective work, are primarily factual determinations reviewed under a clearly erroneous standard.
- Statutory interest must reflect changes in the legal rate over time; where interest is awarded on sums wrongfully withheld, the calculation should run through the date of judgment.

## Conclusion

The court held that the contractors substantially performed and could recover the unpaid contract balance subject to deductions for proven deficiencies and setoffs, while ordering correction of the award by eliminating an improperly allowed extra and recalculating statutory interest using the proper rate change and period through judgment.


Vincenzi v. Cerro, 186 Conn. 612, 442 A.2d 1352 (Conn. 1982)