Legal Definitions - appraisement

Appraisement is a method used to resolve disagreements about the amount or extent of a loss, damage, or obligation under a contract. It is typically employed when both parties agree that one party is responsible (meaning liability is not in dispute), but they cannot agree on the specific financial value or scope of that responsibility. Unlike more formal legal proceedings or arbitration, appraisement is an informal process focused solely on determining the monetary value or the precise scope of what is owed.

Here are some examples to illustrate how appraisement works:

• Insurance Claim for Property Damage:

  Imagine a homeowner's garage roof is severely damaged by a fallen tree during a storm. The homeowner files a claim with their insurance company. The insurer readily agrees that the storm damage is covered by the policy (liability is not disputed). However, the homeowner's contractor estimates the repair cost at $15,000, while the insurance company's adjuster believes the repairs should only cost $10,000. Since both parties agree the damage is covered but disagree on the *cost* of repairs, they might opt for appraisement. An independent appraiser would then assess the damage and determine a fair and reasonable repair cost, which both parties would typically agree to accept.

  This illustrates appraisement because the core issue of liability (that the insurer must pay for storm damage) is settled. The dispute is solely about the financial "amount" of that liability.

• Construction Contract Dispute over Defects:

  A business hires a contractor to build a new office wing. After completion, the business acknowledges that the contractor built the wing as per the contract's general specifications (liability for completing the work is not disputed). However, the business discovers several minor structural flaws and claims the overall value of the new wing is diminished as a result. The business wants a $50,000 reduction in the final payment, but the contractor argues the flaws are negligible and only warrant a $10,000 adjustment. To resolve this, they could use appraisement to have an expert determine the fair financial impact of the defects on the property's value.

  Here, the contractor's responsibility for the construction is not questioned. The disagreement centers on the "extent" of the financial impact of the alleged defects, making it a suitable scenario for appraisement.

• Commercial Goods Dispute:

  A clothing retailer orders a large shipment of custom-designed shirts from a manufacturer. When the shirts arrive, the retailer confirms they are the correct design and quantity (liability for fulfilling the order is not disputed). However, the retailer finds that a significant portion of the shirts have slight color variations from the approved sample, making them less desirable for sale at full price. The retailer proposes a 25% discount on the affected shirts, while the manufacturer offers only 10%. To avoid a lengthy dispute, they might agree to appraisement to have an independent textile expert assess the impact of the color variations on the shirts' market value and determine an appropriate price adjustment.

  This example demonstrates appraisement because the manufacturer's obligation to deliver the shirts is not contested. The dispute is purely about the "amount" of financial adjustment needed due to the quality discrepancy.