The Restatement 2nd of Contracts is a notable resource for legal professionals and scholars alike. The document outlines the fundamental principles of contract law and is used as a reference point in many legal disputes. One particularly important section of the Restatement 2nd of Contracts is section 71, which deals with the topic of contract performance and the concept of “substantial performance.”
Section 71 states that if a party to a contract has performed “substantially” but not fully, the other party may not be entitled to full compensation for damages. Instead, the party who performed substantially may only be liable for the difference between the value of their performance and the value of full performance. This concept is known as the doctrine of substantial performance.
The doctrine of substantial performance can be difficult to apply in practice, as there is no clear-cut definition of what constitutes “substantial” performance. Courts typically look at the specific circumstances of each case to determine whether a party has performed substantially. Factors that may be considered include the purpose of the contract, the nature of the performance, and the extent to which the non-performing party has been harmed by the incomplete performance.
One of the key implications of section 71 is that it can provide a defense for a party who has performed substantially but not perfectly. For example, if a contractor has completed 90% of a construction project but has not yet installed the final fixtures, the doctrine of substantial performance may prevent the property owner from claiming full damages for breach of contract. This can be a significant benefit for the performing party, as it may reduce the amount of damages they are liable for.
It should be noted, however, that the doctrine of substantial performance is not a complete defense. If a party has not performed substantially, they may still be liable for damages. Additionally, some contracts may explicitly require full performance, in which case the doctrine of substantial performance may not apply.
In conclusion, section 71 of the Restatement 2nd of Contracts is an important resource for legal professionals dealing with contract disputes. The doctrine of substantial performance can provide a useful defense for parties who have performed substantially but not perfectly. However, the specific circumstances of each case must be carefully considered to determine whether the doctrine applies.