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Dispute Illustrates ‘Substantial Performance’ Doctrine

Construction contracting, unlike most other contractual transactions, often leaves open to interpretation the question of whether a contract has been sufficiently performed to entitle a party to payment. It is virtually impossible to have the equivalent of the Uniform Commercial Code’s “perfect tender” in construction contracting. Objectively, construction contracts typically define what constitutes “substantial completion” of a project, the point in a project where the work is sufficiently complete to allow the owner to occupy and use the project for its intended purpose. However, substantial completion, contractually defined or not, does not necessarily mandate the precise performance of every contractual requirement. That is where the doctrine of substantial performance comes into play.

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