Fairbanks Soap Co. Ltd. v. Sheppard

Fairbanks Soap Co. Ltd. v. Sheppard

On the proved facts the respondent intentionally ceased work while the machine was not capable of producing the specified soap chips and left tasks requiring engineering skill undone; this was an abandonment and not substantial performance, so the respondent could not recover under the lump‑sum contract and the contract was cancelled with return of the $1,000 and assessed damages to the appellant, while a limited separate installation claim was allowed.

Citation
[1953] 1 SCR 314
Parties
Appellant/plaintiff: Fairbanks Soap Company Limited; Respondent/defendant: Mel Sheppard
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
2 March 1953
Procedural Posture
Contract Appeal / Appeal to the Supreme Court of Canada From the Court of Appeal for Ontario
Outcome
Appeal allowed; contract declared cancelled; appellant awarded damages; respondent allowed limited counterclaim; costs to appellant.
Legal Topics
Abandonment of Contract, Substantial Performance, Quantum Meruit, Rescission, Damages, Removal of Unfinished Work
Source Language
English
Contract Law Commercial Law Abandonment of Contract Substantial Performance Quantum Meruit Rescission Damages Removal of Unfinished Work

Case Brief

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Parties

Fairbanks Soap Company Limited

Appellant/plaintiff

Mel Sheppard

Respondent/defendant

Procedural Posture

Contract Appeal / Appeal to the Supreme Court of Canada From the Court of Appeal for Ontario

Legal Issues

  1. 1 Whether the contractor substantially performed the lump‑sum contract
  2. 2 Whether the contractor abandoned the contract and thereby forfeited right to the contract price
  3. 3 Whether a new contract or quantum meruit claim arose from the owner’s retention of the unfinished work

Ratio Decidendi

On the proved facts the respondent intentionally ceased work while the machine was not capable of producing the specified soap chips and left tasks requiring engineering skill undone; this was an abandonment and not substantial performance, so the respondent could not recover under the lump‑sum contract and the contract was cancelled with return of the $1,000 and assessed damages to the appellant, while a limited separate installation claim was allowed.

Court Disposition

Appeal allowed; contract declared cancelled; appellant awarded damages; respondent allowed limited counterclaim; costs to appellant.

Orders

  • Declaration that the contract dated 21 September 1945 is cancelled
  • Appellant to recover from respondent the sum of $2,684.68