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Abandonment of contract

Abandonment of contract means failure to fulfil a contractual obligation, which will affect the abandoner's entitlement to the contractually agreed consideration, for example in the case of Sumpter v Hedges (1898).

Facts
Mr Sumpter was a builder. He had a contract to build two houses and stables for Mr Hedges for £560. He did work valued at £333 and said he had to stop because he had no more money. Substantial payments on account have in fact been made to the builder. Hedges finished the building, using materials which Sumpter had left behind. Sumpter sued for the outstanding money.

Bruce J found that Mr Sumpter had abandoned the contract, and said he could obtain money for the value of the materials but nothing for the work.

Judgment
The Court of Appeal found that Mr Sumpter had abandoned the building work and emphasised that it left Mr Hedges without any choice of whether to adopt the work. It held that Mr Hedges had to pay for the building materials that he used, but did not need to reimburse Mr Sumpter for the half-built structures. AL Smith LJ gave the leading judgment:

In this case the plaintiff, a builder, entered into a contract to build two houses and stables on the defendant's land for a lump sum. When the buildings were still in an unfinished state the plaintiff informed the defendant that he had no money, and was not going on with the work any more. The learned judge has found as a fact that he abandoned the contract. Under such circumstances, what is a building owner to do? He cannot keep the buildings on his land in an unfinished state for ever. The law is that, where there is a contract to do work for a lump sum, until the work is completed the price of it cannot be recovered. Therefore the plaintiff could not recover on the original contract. It is suggested however that the plaintiff was entitled to recover for the work he did on a quantum meruit. But, so that may be, there must be evidence of a fresh contract to pay for the work already done. With regard to that, the case of Munro v Butt[1] appears to be exactly in point. That case decides that, unless the building owner does something from which a new contract can be inferred to pay for the work already done, the plaintiff in such a case as this cannot recover on a quantum meruit. In the case of Lysaght v Pearson,[2] to which we have been referred, the case of Munro v Butt[3] does not appear to have been referred to. There the plaintiff had contracted to erect on the defendant's land two corrugated iron roofs. When he had completed one of them, he does not seem to have said that he abandoned the contract, but merely that he would not go on unless the defendant paid him for what he had already done. The defendant thereupon proceeded to erect for himself the second roof. The Court of Appeal held that there was in that case something from which a new contract might be inferred to pay for the work done by the plaintiff. That is not this case. In the case of Whitaker v Dunn[4] there was a contract to erect a laundry on defendant's land, and the laundry erected was not in accordance with the contract, but the official referee held that the plaintiff could recover on a quantum meruit. The case came before a Divisional Court, consisting of Lord Coleridge CJ and myself, and we said that the decision in Munro v Butt[5] applied, and there being no circumstances to justify an inference of a fresh contract the plaintiff must fail. My brother Collins thinks that that case went to the Court of Appeal, and that he argued it there, and the Court affirmed the decision of the Queen's Bench Division. I think the appeal must be dismissed.

https://en.wikipedia.org/wiki/Sumpter_v_Hedges