Morin Building Products Co. v. Baystone Construction, Inc. – Case Brief
Morin Building Products Co. v. Baystone Construction, Inc., 717 F.2d 413 (7th Cir. 1983).
Facts: General Motors hired Baystone Construction (D) to build an addition for a Chevrolet plant. Baystone hired Morin Building Products (P) to supply and erect the aluminum walls. The contract required that “aluminum type 3003, not less than 18 B & S gauge” be used for the exterior siding. The contract also provided that all work was to be done subject to approval of the architect and that his decision would be final, and that decisions regarding acceptability would rest strictly with General Motors. Whatever was customary or usual in erecting other buildings shall not enter into any consideration or decision. P did the work but General Motors rejected it and D hired another subcontractor to replace it.
D refused to pay the balance of the contract price owed to P, $23,000. P sued for the balance and won and D appealed.
Issue: What is the standard regarding satisfaction in commercial construction projects?
Holding and Rule: The standard regarding determination of satisfaction in commercial construction projects is that of an objective reasonable person.
The reasonable person standard is employed when the contract dispute involves commercial quality, operative fitness, or mechanical utility which other knowledgeable persons can judge. The standard of good faith is employed when the contract involves personal aesthetics or fancy.
The building for which the aluminum siding was intended was a factory – not usually intended to be a thing of beauty. The contract refers explicitly to ‘artistic effect.’ This reference appears as number 17 in a list of conditions in a general purpose form contract. And the words ‘artistic effect’ are immediately followed by the qualifying phrase, ‘if within the terms of the Contract Documents,’ which suggests that the ‘artistic effect’ clause is limited to contracts in which artistic effect is one of the things the buyer is aiming for; it is not clear that he was here. The other clause on which D relies, relating to the quality or fitness of workmanship and materials, was incorporated by reference to another form contract of which it is paragraph 35. We are left with more than a suspicion that the artistic-effect and quality-fitness clauses in the form contract used here were not intended to cover the aesthetics of a mill-finish aluminum factory wall.
The fact that General Motors accepted the replacement siding proves little, for there is evidence that the replacement siding produced the same striped effect, when viewed from an acute angle in bright sunlight, that P’s had. The contract is ambiguous because of the qualifications with which the terms ‘artistic effect’ and ‘decision as to acceptability’ are hedged about, and the circumstances suggest that the parties probably did not intend to subject P’s rights to aesthetic whim.