Understanding the Three Standards of Performance in a Contract

The video tutorial explains the standards of performance under a contract, focusing on complete performance, material breach, and substantial performance. Complete performance means fulfilling all contractual obligations, while a material breach occurs when a significant task is left incomplete. Substantial performance involves completing most material duties, with minor tasks unfinished, which may lead to an offset but not a breach. Examples are provided to illustrate these concepts, such as building a house with minor errors in finishing touches.

What is the term used when all obligations under a contract are fulfilled without any issues?

• Partial Fulfillment

• Complete Performance

• Substantial Performance

• Material Breach

Which of the following best describes a material breach?

• Completing most tasks with minor issues

• Failing to complete a significant obligation

• Completing all tasks under a contract

• Delivering more than required

What does substantial performance mean in the context of a contract?

• Majority of tasks are completed with minor issues

• Significant tasks are left incomplete

• No tasks are completed

• All tasks are completed perfectly

In the case of substantial performance, what might the other party seek if full value is not delivered?

• Offset or reduction in amount owed

• Additional compensation

• Termination of contract

• Full payment

If a contractor builds a house but uses the wrong color paint, what performance standard does this illustrate?

• Non-performance

• Substantial Performance

• Material Breach

• Complete Performance