What happens when a party demonstrates substantial performance?

When a party demonstrates substantial performance, they may be entitled to payment or a remedy despite minor failures. Substantial performance occurs when a party has fulfilled enough of their contractual obligations to warrant enforcement of the contract, even if they haven’t completed every detail perfectly.

This principle is rooted in the idea that while a contract should be performed as agreed, the courts recognize that sometimes minor deviations from the contract terms do not fundamentally undermine the purpose of the agreement. As long as the non-compliance is not material – meaning it does not significantly affect the overall value of the performance – the performing party can still seek compensation for their efforts.

The courts often allow for the recovery of the contract price minus the cost of any defects that need to be rectified. This concept reinforces contractual relationships by preventing unjust enrichment and ensuring that parties are fairly compensated for their work, even when there have been minor imperfections in performance.