Case Citation
Legal Case Name

Grossman Holdings Ltd. v. Hourihan Case Brief

Supreme Court of Florida1982Docket #1358511
414 So. 2d 1037 41 A.L.R. 4th 125 Contracts Remedies Property

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Case Brief Summary & Legal Analysis

General Brief
4 min read

tl;dr: A builder constructed a house facing the wrong direction. The court held that the proper damages were not the cost to rebuild the entire house, but rather the diminution in the home’s value caused by the incorrect orientation, due to the principle of economic waste.

Legal Significance: This case formally adopted the Restatement (First) of Contracts § 346(1)(a) in Florida, establishing the “economic waste” doctrine as the standard for measuring damages in construction contract breaches, limiting recovery to diminution in value when repair costs are grossly disproportionate to the benefit.

Grossman Holdings Ltd. v. Hourihan Law School Study Guide

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Case Facts & Court Holding

Key Facts & Case Background

George and Katrina Hourihan contracted with Grossman Holdings Ltd. for the construction of a new house. The contract, architectural drawings, and model home all specified that the house would have a southeast exposure. The contract stipulated that the builder would construct the house “substantially the same” as the plans. During construction, Grossman displayed new drawings showing the Hourihans’ house as a mirror image of the original plan, with an incorrect orientation. The Hourihans immediately objected and demanded the house be built according to the original specifications. Grossman refused and completed the house with the incorrect orientation. The Hourihans sued for breach of contract. The trial court found a breach but refused to award damages, reasoning that rebuilding the house would constitute economic waste and that the property’s overall market value had increased since the contract date. The district court of appeal reversed, holding that the economic waste doctrine did not apply to residential construction and that the proper measure of damages was the cost to reconstruct the house.

Court Holding & Legal Precedent

Issue: When a construction contract is breached in a manner that would be grossly and disproportionately expensive to remedy, is the proper measure of damages the cost to cure the defect or the diminution in the property’s value caused by the defect?

The proper measure of damages is the diminution in value, not the Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo con

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IRAC Legal Analysis

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Legal Issue

When a construction contract is breached in a manner that would be grossly and disproportionately expensive to remedy, is the proper measure of damages the cost to cure the defect or the diminution in the property’s value caused by the defect?

Conclusion

This decision establishes the economic waste doctrine as a key limitation on Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi

Legal Rule

For a breach of a construction contract involving defective or unfinished construction, Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia des

Legal Analysis

The Supreme Court of Florida resolved a conflict among its lower courts Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lore

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Flash Summary

  • For a construction contract breach, damages are the cost of repair
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehende

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