New Era v. Forster

• New Era Homes Corp. = "New Era" = plaintiff = a construction firm
• Forster = defendant = person who hired "New Era" for home renovation
• The total price in the contract was $3,075
  1. $150 at contract signing
  2. $1,000 at delivery of materials
  3. $1,500 rough work
  4. $425 upon completion
• New Era commenced the construction project.
• Forster made the 1st 2 payments.
• At the work stage, Forster refused to make the 3rd payment.

• New Era sued Forster.
• New Era demanded $1,500 for the rough work.
• Forster accepted his default on the contract.
• The jury awarded New Era $1,500.
• New Era also won in the Appellate Division.

Is a contract with periodic partial payments divisible such that each payment is consideration for a specified portion of the contract?

No. A contract with periodic partial payments is an entire contract with 1 consideration for the full job.

• New Era can either
  1. collect in quantum meruit or
  2. for the value it had lost

In a construction contract, the separate payments aren't allocated to separate components of the job. In these construction contracts, 1 whole contract exist. Thus, you cannot take that 1 contract & creates separate sub-contracts.

• Installment Contract = separate payments
• Divisible contract = separate performances
• Construction contracts are presumed not to be divisible.