Performance Flashcards
Substantial Performance
Substantial performance is a legal principle in contract law that allows a party to fulfill their contractual obligations even if there are minor deviations from the terms specified in the contract.
The key idea is that the performance is close enough to what was agreed upon that the contract’s overall purpose is achieved.
Key Points
Sufficient Fulfillment: The performance must be sufficient to meet the essential purpose of the contract.
Minor Deviations: Only minor deviations from the contract terms are allowed; significant deviations may constitute a breach of contract.
Example: In the case of Jacob & Youngs v. Kent, the contractor used a different type of pipe than specified in the contract. The court ruled that the contractor had substantially performed because the difference in pipe did not significantly affect the overall purpose of the construction.
Substantial performance ensures that parties are not unfairly penalized for minor mistakes or variations, as long as the main objectives of the contract are met.
Other Uses of Substantial Performance
Recovery of Payment: A party who has substantially performed their contractual obligations can seek payment for the work completed, even if there are minor deviations from the contract terms.
Mitigation of Damages: It can help mitigate damages by demonstrating that the essential purpose of the contract was fulfilled, reducing the amount of compensation owed for minor breaches.
Evaluation of Performance: Courts use the doctrine to evaluate whether a party’s performance meets the standard required by the contract, ensuring fairness in contractual relationships1.
Example
Construction Contracts: If a contractor builds a house but uses slightly different materials than specified, they can still recover payment if the house meets the overall specifications and purpose.
Substantial performance ensures that parties are not unfairly penalized for minor deviations, promoting fairness and practicality in contract enforcement.
