DOCTRINE OF SUBSTANTIAL PERFORMANCE 

Substantial performance is a doctrine according to which one party may still recover damages under a contract if it substantially performs its duties under the contract even though that individual has not in some way complied with the contract. Keeping in mind that this practice typically does not extend to the selling of products. Rather, it applies to construction, property and construction contracts. That being said, it could also apply to employment contracts, in particular where an employee may have to perform substantially to receive a certain benefit, i.e. working in a company for 5 years before his or her 401(k) is established.

An Overview of the Substantial Performance: 

This theory is used to determine the efficiency of the contract. To use this as an argument in a legal dispute, a party must show that he meets the requirement of satisfactory results. If there is a material breach on the part of either party, the substantial performance is not fulfilled. The fulfilment of one's commitments will be met if the exact terms and conditions stated in the contract have just a minor difference. The measure used to assess significant performance is whether you can account for the discrepancy or absence of results. For example, in a contract, A agreed to pay 50k red bricks but sent only 45k, this constitutes substantial performance unless the bricks were not delivered on the date indicated in the contract. 

When has a Party Substantially performed?

 As mentioned above, the party has acted substantially if there is no significant violation of the contract. A material breach simply means that the party either failed to perform the contract or modified its performance in such a way that the material terms of the agreement were not complied with. For example, if you paid to a carpenter to make a table from a bamboo tree but instead, he made it of rosewood tree then the carpenter cannot argue for substantial performance since the contract specifies that you want a table made up of the bamboo tree. Therefore, the carpenter must fix it by making a new table from bamboo; he cannot be paid twice since he materially breached the contract the first time when he made the table from the rosewood tree.

Exceptions:

1. If it is clearly stated in the contract that the specific and complete performance of the condition is must, then the party is at obligation to fulfil it. For example, if the contract clearly states that 200 sacks of rice are to be delivered, and only 190 sacks are delivered, then the seller has to continue his obligation of sending the additional 10 sacks of rice.
2. If the performance gets completed by making slight changes, then the party can’t use the doctrine of substantial performance and must correct the mistake.