Northern Delaware Industrial Development Corp. v. E.W. Bliss Co.

245 A.2d 431 (1968)

Quick Summary

Northern Delaware Industrial Development Corp. and Phoenix Steel Corp. (plaintiffs) versus E.W. Bliss Co. (defendant) over a contract to modernize a steel plant. The plaintiffs sought to enforce a contract provision requiring additional workers for a second shift due to project delays.

The Court of Chancery declined to order specific performance, citing impracticality and lack of precision in the contract language. Instead, it suggested that plaintiffs could seek damages for any losses incurred.

Facts of the Case

The Northern Delaware Industrial Development Corporation and Phoenix Steel Corporation (plaintiffs) entered into a contract with E.W. Bliss Company (defendant) for the expansion and modernization of a steel fabricating plant owned by Phoenix Steel Corporation in Claymont, Delaware. The contract was a large-scale project, priced at $27,500,000, and covered a plant site of approximately sixty acres.

However, the work did not progress as quickly as anticipated, leading to delays and the shutdown of one of Phoenix’s steel mills. The plaintiffs requested the court to order the defendant to hire additional workers to create a second shift, as stipulated in the contract, to accelerate the modernization process during the shutdown period.

The defendant fell behind on work completion schedules, and the plaintiffs sought to enforce this aspect of the contract through the court.

Procedural Posture and History

  1. Plaintiffs sought a court order to compel Bliss to bring in additional workers.
  2. The Court initially refused, questioning its appropriateness and feasibility.
  3. Plaintiffs requested reargument, seeking an order for what they claimed was a ministerial act by Bliss to hire more workers.
  4. The Court considered the reargument but upheld its decision to decline jurisdiction over specific performance of the contract.

I.R.A.C. Format

Issue

Whether the Court of Chancery should order specific performance to compel E.W. Bliss Company to hire additional workers for a second shift as per the contractual agreement with Northern Delaware Industrial Development Corporation and Phoenix Steel Corporation.

Rule of Law

A court of equity may refuse to order specific performance of a building contract when it would be impractical to enforce such an order or when it would require the court to become excessively involved in supervising a complex and ongoing construction project unless special circumstances or public interest is directly involved.

Reasoning and Analysis

The Vice Chancellor MARVEL concluded that the court should not commit to supervising the execution of a complex construction contract through specific performance. This decision was based on the ambiguity of the contractual provision in question and the impracticality of enforcing an order that would specify the number of workers on the job site.

There were also concerns about whether additional laborers would be available and whether their presence might hinder rather than help the project’s completion. The court also noted that equity courts generally do not enforce personal service contracts or construction contracts due to practical difficulties in compelling performance.

The plaintiffs’ request was likened to asking for enforcement of personal services, which is traditionally not granted by equity courts. The court maintained that if plaintiffs had incurred losses due to delays, they could seek damages through legal means.

Conclusion

The Court declined to exercise its jurisdiction to order specific performance regarding the hiring of additional laborers as requested by the plaintiffs and denied their motion for reargument.

Key Takeaways

  1. Specific performance will not be ordered for construction contracts if supervision by the court is impractical.
  2. Courts typically do not enforce contracts for personal services due to difficulties in compelling performance.
  3. Plaintiffs may pursue damages for breach of contract rather than seeking specific performance in complex construction disputes.

Relevant FAQs of this case

What factors make specific performance an impractical remedy in construction contracts?

In determining the impracticality of specific performance for construction contracts, courts consider the complexity of supervision required, the potential for hindering project completion, and the difficulty in defining clear terms of performance.

  • For example: Mandating a contractor to complete a custom-designed bridge involves constant judicial oversight to ensure specifications are met, which is both burdensome and may cause delays due to frequent court interventions.

Why are personal service contracts typically not enforced through specific performance?

Personal service contracts are generally not subject to specific performance due to the personal nature of the services, which makes compulsion problematic and because Courts respect individual autonomy over one’s service labor.

  • For example: A contract with an artist for a unique mural would not be enforced by specific performance because compelling the artist’s physical act of painting could undermine the quality and integrity of the work.

When is specific performance justified despite practical difficulties?

Specific performance may be justified if there is a public interest at stake or if the subject matter of the contract is unique and irreplaceable, making monetary damages an inadequate remedy.

  • For example: Ordering a developer to complete a publicly-funded hospital build may be warranted by the court due to its significant public health implications, even if it requires active supervision on part of the judiciary.

References

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