A homeowner hired a contractor for a $45,000 kitchen renovation. The contractor completed 80% of the work before abandoning the project. Under SC law, what is the contractor's maximum exposure for actual damages if the homeowner must pay another contractor $15,000 to complete the work?
Correct Answer
A) $15,000
The contractor is liable for the actual damages incurred by the homeowner, which is the $15,000 cost to complete the work.
Why This Is the Correct Answer
Option A is correct. Under SC law, the contractor's liability for actual damages is measured by the cost incurred by the homeowner as a direct result of the breach — specifically, the $15,000 cost to hire another contractor to complete what was abandoned. Actual damages are the economic loss directly caused by the breach, not a percentage of the original contract or the value of work completed.
Why the Other Options Are Wrong
Option B: $9,000
Option B is incorrect. $9,000 appears to be derived from 60% of the remaining 20% of work ($45,000 × 20% × some factor), but this calculation has no legal basis under SC contract law. Damages are not computed as a percentage discount on the unfinished portion.
Option C: $12,000
Option C is incorrect. $12,000 does not correspond to any standard legal measure of actual damages in this scenario. It falls between $9,000 and $15,000 without a logical derivation from the facts given.
Option D: $36,000
Option D is incorrect. $36,000 represents 80% of the contract price (the value of work completed), not the homeowner's actual loss. The homeowner already received 80% of the work — their loss is only the additional cost to complete the remaining 20%, which is $15,000.
Memory Technique
Remember: 'Actual damages = what it costs to fix the breach.' In abandonment cases, ask: 'What did the homeowner have to spend because of the contractor's failure?' That expenditure — $15,000 to complete — is the actual damage. The contractor gets no 'credit' deduction for work already done when calculating the owner's out-of-pocket loss from the breach.
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