Lump sum contract substantially performed with minor defects (Hoenig v Isaacs)

In Hoenig v Isaacs the Court of Appeal held that, where a contract provides for a lump sum on completion of specified work, the courts lean against a construction that would deprive the contractor of payment simply because there are some defects or omissions. Denning LJ said the promise to complete is a term but not a condition: unless the breach goes to the root of the contract, such as abandoning the work half done, the employer cannot resist payment. He must pay and bring a cross-claim for the defects, or set them up in diminution of the price, usually measured by the cost of making them good. Lucia finished the work, Owen has used it, and the defects cost £900 to remedy against a £15,000 price. The contract was substantially performed. Owen must pay the £10,000 balance less £900, so £9,100.

Why A is wrong: The court leans against treating entire, defect-free performance as a condition precedent in a lump sum contract unless clear words require it.

Why B is wrong: Quantum meruit arises only where the contract price cannot be claimed, for example where performance fails at the root; here it was substantial.

Why C is wrong: Substantial performance entitles the contractor to the price, but subject to a deduction for the cost of putting right the defects.

Why E is wrong: Only a breach going to the root of the contract would justify refusing payment; minor defects in completed work do not.