|
use reasonable efforts to bring profits and revenues into existence. As a result, the contract was supported by consideranon, and Lady Duff-Gordon could not avoid her side of the bargain by contending that the agreement imposed no enforceable obligation on Wood.
Perhaps the most important principle of interpretation endorsed by Cardozo in Wood v. Lucy, Lady Duff- Gordon is his famous statement that “[w]e are not to suppose that one party was to be placed at the mercy of the other.” Id. at 91. That principle, used to imply an obligation to make reasonable efforts in the Wood case, also underlies the court’s treatment of the measure of damages in Jacob & Youngs v. Kent. Kent hired Jacob & Youngs to build a country residence. The contract provided that all pipe should be “of the grade known as ‘standard pipe’ of Reading manufacture.” 230 N.Y. at 240. After Jacob & Youngs had encased the plumbing in the walls, Kent learned that some of the pipe installed had been made at factories other than Reading. Kent’s architect ordered Jacob & Youngs to demolish substantial parts of the completed structure to replace the pipe. Jacob & Youngs refused and, when final payment was refused, brought an |
action for the contract balance. Supreme Court directed a verdict for Kent, excluding evidence that the pipe used was the same in quality as Reading pipe. The Appellate Division reversed and granted a new trial, and Kent appealed.
A divided Court of Appeals affirmed. Writing for the court’s majority, Judge Cardozo emphasized that if Kent were permitted to insist on reconstruction of the house, “the significance of the default [would be] grievously out of proportion to the oppression of the forfeiture.” Id. at 243-44. In holding that Kent was limited to the difference in value caused by the difference in pipe, Judge Cardozo articulated both the general rule, and the exception applicable to cases like Jacob & Youngs: “The owner is entitled to the money which will permit him to complete, unless the cost of completion is grossly and unfairly out of proportion to the good to be attained. When that is true, the measure is the difference in value. Specifications call, let us say, for a foundation built of granite quarried in Vermont. On the completion of the building, |
 The 1921-23 Court in conference. From left: Judges Pound, McLaughlin, Cardozo,
Crane, Andrews, Chief Judge Hiscock and Judge Hogan. COURT OF APPEALS COLLECTION | |
 The Historical Society of the Courts of the State of New York
| |
