Substantial performance
This is where work agreed is almost finished and the court then orders that
money must be paid, but deducts the amount needed to correct a minor
defect. This would only arise where the defect would amount to a breach of
warranty, because if there was a breach of condition the innocent party
would be able to repudiate. The idea of substantial performance is to take
into account the reality of a situation where it is impractical to insist on
absolute completion, and in order to see a contract fulfilled a small
compromise is accepted. The origins of substantial performance are said to
lie in the somewhat condescending case of Boone v Eyre (1779), where a
plantation was sold, complete with slaves, but on transfer of ownership it
was found that the slaves had gone. The performance was said to have
substantially taken place because the main subject matter of the contract
was there.
An example of performance could be seen if a new kitchen was to be fitted
in a house. Imagine that the work was complete except for one wall cupboard,
and the fitter requested payment. It would be unfair to have to pay the whole
price if the work was defective, but if the fitter was clearly not going to fit
the remaining cupboard for some reason, it would be better to settle the
account and get a new fitter to complete the work. In this case the court
would order the agreed amount to be paid, but deduct the amount that would
be needed to pay another fitter to install the remaining cupboard.
212 Contract law
Cutter v Powell (1795)
A sailor died during a voyage. His widow’s claim for payment for the
part of the journey completed was unsuccessful, because although the
sailor may have carried out his tasks exactly according to the agreement,
the obligations would not be complete until the end of the voyage.Hoenig v Isaacs (1952)
A flat was to be decorated and furnished for £750. When the work was
over the customer only paid £400 saying that the work was not yet
complete. It was found, however, that although there were defects, the
cost of putting them right was far less than the amount deducted. It was
held that there was substantial performance, and the full amount was
payable less £55 to remedy the defects.What if several cupboards were missing, or half of the kitchen was still in pieces
in packing crates? How much would need to be completed to be ‘substantial’?