At
common law
In law, common law (also known as judicial precedent, judge-made law, or case law) is the body of law created by judges and similar quasi-judicial tribunals by virtue of being stated in written opinions."The common law is not a brooding omnipresen ...
, substantial performance is an alternative principle to the
perfect tender rule
In the United States, the perfect tender rule refers to the legal right for a buyer of goods to insist upon "perfect tender" by the seller. In a contract for the sale of goods, if the goods fail to conform exactly to the description in the contract ...
. It allows a court to imply a term that allows a partial or substantially similar performance to stand in for the performance specified in the contract.
This principle is relevant when a contractor's performance is in some way deficient, through no willful act by the contractor, yet is so nearly equivalent that it would be unreasonable for the owner to deny the agreed upon payment. If a
contractor successfully demonstrates substantial performance, the owner remains
obligated to fulfill payment, less any damages suffered as a result of the deficiencies in workmanship by the contractor.
The principle is also found in the law of
unilateral contract
A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to tr ...
s. Unilateral contracts are contracts in which one party offers a promise in exchange for an actual performance. Traditionally, such contracts were deemed to be effective once the specified performance was tendered, and could be revoked at any time prior to completion of the performance, presenting the notorious "Cedric Brooklyn Bridge problem": in theory, A could say to B "I'll give you $100 if you walk across the
Brooklyn Bridge
The Brooklyn Bridge is a hybrid cable-stayed/ suspension bridge in New York City, spanning the East River between the boroughs of Manhattan and Brooklyn. Opened on May 24, 1883, the Brooklyn Bridge was the first fixed crossing of the East River ...
", and then, just before B finishes crossing, pull up to him in a car and say "The deal is off," at which point no contract would be formed and A would not be liable to B for anything. This result was deemed unacceptable by many jurists and legal scholars, and applied the doctrine of substantial performance to this situation, effectively deeming someone who had begun the performance to have established an
option contract
An option contract, or simply option, is defined as "a promise which meets the requirements for the formation of a contract and limits the promisor's power to revoke an offer". Option contracts are common in professional sports.
An option contrac ...
to hold the unilateral contract open. This principle is enunciated in Section 237 of the
Restatement (Second) of Contracts
The Restatement (Second) of the Law of Contracts is a legal treatise from the second series of the Restatements of the Law, and seeks to inform judges and lawyers about general principles of contract common law. It is one of the best-recognized an ...
.
Notable cases
*''
Cutter v Powell
''Cutter v Powell'' (1795) 101 ER 573 is an English contract law case, concerning substantial performance of a contract.
Facts
Cutter agreed he would sail with Powell from Kingston, Jamaica to Liverpool, England. The contractual note read as ...
'' (1795) 101 ER 573
*''
Sumpter v Hedges
''Sumpter v Hedges'' 898
__NOTOC__
Year 898 ( DCCCXCVIII) was a common year starting on Sunday (link will display the full calendar) of the Julian calendar.
Events
By place Europe
* January 1 – King Odo I (or Eudes) dies at La Fère (Northern France) af ...
1 QB 673 is an English contract law case, concerning substantial performance of a contract and restitution for unjust enrichment.
Facts
Mr Sumpter was a builder. He had a contract to build two houses and stables for M ...
''
898
__NOTOC__
Year 898 ( DCCCXCVIII) was a common year starting on Sunday (link will display the full calendar) of the Julian calendar.
Events
By place Europe
* January 1 – King Odo I (or Eudes) dies at La Fère (Northern France) af ...
1 QB 673
* ''
Jacob & Youngs v. Kent'' 230 N.Y. 239 (1921) — The
New York Court of Appeals ruled that a
contract
A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to tran ...
ed homebuilder was entitled to full payment without tearing down and rebuilding the
residence
A residence is a place (normally a building) used as a home or dwelling, where people reside.
Residence may more specifically refer to:
* Domicile (law), a legal term for residence
* Habitual residence, a civil law term dealing with the status ...
, simply because within it he had installed piping equal to, though a different brand name than, that which had been agreed upon in the contract.
*''
Hoenig v Isaacs
''Hoenig v Isaacs'' Somervell_LJ_upheld_the_decision_of_an_Official_Referee_at_first_instance,_His_Honour_Lionel_Leach.html" ;"title="English contract law">952EWCA Civ 6is an English contract law case concerning substantial performance of an e ...
''
EWCA_Civ_6_2_All_ER_176
*''Bolton_v_Mahadeva.html" ;"title="952
EWCA Civ 6 2 All ER 176
*''Bolton v Mahadeva">952
EWCA Civ 6 2 All ER 176
*''Bolton v Mahadeva'' [1972] 2 All ER 1322
*''Miles v Wakefield Borough Council'' [1987] AC 539, Lord Bridge and Lord Brightman reincarnating the doctrine in ''Cutter v Powell'' to use against a council registrar who refused to work 3 out of 37 hours, as part of industrial action. They advised the employer that they needed to pay nothing.
*''
Wilusynski v London Borough of Tower Hamlets
''Wiluszynski v London Borough of Tower Hamlets'' 989ICR 439 is a UK labour law case concerning the contract of employment. It held that if an employment was only partly performed due to a strike, this could be construed as not completing an ent ...
''
989ICR 493, Nicholls LJ holding no "substantial performance" by - and no pay whatsoever for - a council worker on industrial action who did everything but answer enquiries from councillors.
* ''Petterson v. Pattberg'',
Petterson v. Pattberg Case Brief Summary
/ref> 1928 New York Court of Appeals case
See also
* Contract law
A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to tran ...
* '' Force majeure''
* Hardship clause
Hardship clause is a clause in a contract that is intended to cover cases in which unforeseen events occur that fundamentally alter the equilibrium of a contract resulting in an excessive burden being placed on one of the parties involved.
Hardsh ...
* Hell or high water clause
A hell or high water clause is a clause in a contract, usually a lease, which provides that the payments must continue irrespective of any difficulties which the paying party may encounter, usually in relation to the operation of the leased asset ...
* Impossibility
In contract law, impossibility is an excuse for the nonperformance of duties under a contract, based on a change in circumstances (or the discovery of preexisting circumstances), the nonoccurrence of which was an underlying assumption of the ...
* Mutual assent
Meeting of the minds (also referred to as mutual agreement, mutual assent or ''consensus ad idem'') is a phrase in contract law used to describe the intentions of the parties forming the contract. In particular, it refers to the situation where t ...
References
Contract law
Legal doctrines and principles
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