Contractor's Ability to Complete the Work for a Fair Price
The Terminix Co. v. Contractors' State etc. Bd. (1948) court concluded that completion of the job by Terminix on the terms offered would have amounted to more than complete performance or restitution, and therefore Terminix was not guilty of any violation:
"Its offer in good faith, coupled with its admitted ability to complete the work for a fair price, must, under the circumstances, and for present purposes, be deemed the equivalent of performance." (Terminix Co. v. Contractors' State etc. Bd., supra, 84 Cal. App. 2d at p. 174.)
The Terminix court noted that "A contractor cannot be held guilty of a violation of the act so long as he stands ready, able and willing to fulfill his contract." (Ibid.)
But the Terminix court also indicated that such offers to repair substandard work must occur before payment in full for the project.
"A contractor who has done inferior work is not a violator of the statute if, before he has made any settlement with the owner, he offers and is able and willing to replace the inferior work with good work at no expense to the owner.
In determining whether injury has resulted to the owner, the positions of the owner and contractor must be judged as of the time when their business is concluded.
Although during the course of the work there may be mistakes and failures on the part of the contractor to keep his agreements, if, when the time for payment for the work arrives, he makes a fair and satisfactory settlement with the owner, he has been guilty of no breach of the law and the same, of course, is true if he corrects any overcharges whether they were made inadvertently or intentionally." (Terminix Co. v. Contractors' State etc. Bd., supra, 84 Cal. App. 2d at pp. 175-176, italics added.)