Substantial performance is a legal concept which defines when a contractor has fulfilled the obligations of a project to the extent that the project can be considered complete. Put simply, substantial performance means that a certain percentage of work has been done and the remaining tasks necessary to finish the project are minor ones. This concept plays an important role in construction law because it defines when a contractor can be paid for their work.
Substantial performance is a term used to refer to a project that is substantially complete but incomplete in minor details. Generally speaking, substantial performance is defined as a completion which is close enough to the agreed-upon plan that a reasonable person would consider the work to be finished. It is important to note that the determination of whether something has achieved substantial performance is based on the specifics of each individual project and the two parties involved.
Examples of Substantial Performance
For example, let’s imagine a contract to build a 1,000-square-foot home, which includes a two-car garage and a deck. Once the home is fully constructed and the interior decoration is done, the home may be considered substantially complete. However, if the project was initially supposed to also include a fence and a shed, and these tasks were not performed, then the project may not necessarily meet the requirements for substantial performance.
On the other hand, let’s imagine a construction project of the same size but with the addition of a swimming pool. If the contractor were to finish the construction with the interior decoration, but left out the pool because of time constraints, then the project may still be considered substantially complete. Even though the pool isn’t finished and the contractor was not able to meet all of the specifications, the two parties involved may agree to consider the project substantially complete, allowing the contractor to receive payment for the work done.
Conclusion
In conclusion, substantial performance is an important concept in construction law that helps define when a contractor can receive payment for their work. It is defined as a project that is substantially complete but may contain minor details that have not been completed. Every project and situation must be looked at on an individual basis to determine whether or not it meets the criteria of substantial performance.