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Performance: Definition, Example and Related Terms

What is Performance ?

In the context of contract law, 'Performance' refers to the execution or fulfillment of contractual obligations by the parties involved. When a contract is signed, each party agrees to perform certain duties, and 'Performance' is the act of carrying out those duties as specified in the contract. Successful performance is crucial because it signifies the completion of the contract requirements and can lead to the discharge of the contractual obligations.

For example, if a contractor is hired to build a house, their performance would involve completing the construction according to the specifications and time frame agreed upon in the contract. This would mean using the specified materials, meeting safety standards, and finishing the project on schedule.

Performance can vary depending on the terms of the contract. There might be specific deliverables, time frames, or quality standards that need to be met. If a party fails to perform as agreed, they may be in breach of contract, which can result in penalties, damages, or even legal action.

There are different types of performance, including complete performance, which is when all terms of the contract are fully met, and substantial performance, which is when most terms are met, but not all, yet the deviations are minor and don’t defeat the purpose of the contract. Understanding the expectations and requirements of performance is vital to ensure obligations are met and disputes are avoided or resolved effectively.

Example(s)

  • Scenario Description
    A vendor is contracted to deliver 500 laptops to a business by the end of the month. The vendor's performance obligation is met when all 500 laptops are delivered by the specified deadline in good condition. Successfully fulfilling these terms would mean the vendor has effectively performed their contractual duties.
    A software company agrees to provide ongoing tech support for a client for one year. The performance of this contract would involve the company providing timely and efficient technical support services to the client throughout the year, as needed, to ensure the client’s systems run smoothly.

Related terms