Substantial performance

Substantial performance refers to the level of completion of a task or project that meets the standards outlined in the contract or agreement. It generally indicates that the task or project has been completed to a level that is acceptable, even if there are minor issues or discrepancies that still need to be addressed. In legal terms, a party has fulfilled their contractual obligations when they have achieved substantial performance.

Examples

Examples of substantial performance in construction projects include:

• A building that is completed to a level that meets all safety and structural requirements, even if there are minor cosmetic issues that need to be addressed.
• A road that is paved and open to traffic, even if there are minor issues with drainage or landscaping that still need to be resolved.

Examples of substantial performance in service contracts include:

• A software development project that is delivered on time and meets all functional requirements, even if there are minor bugs that need to be fixed.
• A catering service that provides all the food and service as specified in the contract, even if some of the dishes are not quite up to the client's expectations.

In general, substantial performance is met when the contractor or service provider has fulfilled the essential terms of the contract.

Substantial performance — recommended articles

Service Level Agreement — Bidding documents — Retention money — Construction management contract — Request For Proposal — General conditions — Task order — Outsourcing agreement — Supplemental agreement

References

• McNally, R. C., Durmusoglu, S. S., Calantone, R. J., & Harmancioglu, N. (2009). Exploring new product portfolio management decisions: The role of managers' dispositional traits. Industrial Marketing Management, 38(1), 127-143.
• Ballard, G., & Howell, G. (1994). Implementing lean construction: stabilizing work flow. Lean construction, 2, 105-114.
• Gogulanathan, S. B. M. (2018). The doctrine of substantial performance: comparisons between English and Malaysian law. Commonwealth Law Bulletin, 44(3), 318-337.