What is substantial performance?

What will be an ideal response?


Some kinds of contractual duties are very difficult to perform perfectly due to their nature and the limits of human ability. Examples of these are found in construction projects, agricultural contracts, and many contracts for personal or professional services. Such duties are, however, capable of being substantially performed in most cases. Substantial performance is performance that falls short of complete performance in minor respects but does not deprive the promisee of a material part of the consideration that was bargained for. Promisors may make an honest attempt to perform, but due to lack of ability or factors beyond their control, they may fall short of complete performance. If their performance is such that it cannot be returned to them, and there was no express condition for complete performance, they will be held to have substantially performed their duties. This allows the promisor to be compensated for his or her performance. An example of substantial performance is a building that deviates slightly from the contract's specifications. What constitutes substantial performance depends on the circumstances of each case. The promisor who substantially performs is generally entitled to the contract prices less any damage the other party has suffered as a result of the defective performance. If the promisor willfully failed to completely perform, the doctrine of substantial performance will not apply.

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The records of Andrews Company reflect the following data: Work in process, beginning of the month - 4,500 units; 1 / 3 completed at a cost of $2,400 for materials, $825 for labor, and $3,00 . for overhead. Production costs for the month - materials - $20,695; labor - $13,050; overhead - $41,500 Units completed and transferred to finished goods - 35,000 Work in process, end of month - 3,00

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A) A. B) B. C) C. D) D.

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