Owner v. Contractor: Damages Calculation Post-Termination for Non-Performance

The dispute arose from a construction contract where the contract stipulated a specific penalty for late completion, and the owner subsequently terminated the contract before the work was finished, subsequently employing another contractor to complete the work at a higher cost. The court held that when a contract is validly terminated for the contractor's fault before full execution, the contract price stipulated for the work is no longer applicable; instead, the proper measure of damages is the difference between the actual cost incurred by the owner to complete the project and the original contract price, as the stipulated penalty clause was designed only for delays in performance, not for complete non-performance following termination.