A breached contract can cause significant financial harm to the non-breaching party. In Florida, a business or organization may be held legally liable for damages caused by a contract breach. There are some questions over what exactly constitutes a breach of contract. In some cases, a minor (immaterial) defect may be deemed sufficient to satisfy the terms of the contract on the grounds of substantial performance. In this blog post, our Clearwater business law attorney explains the most important things to know about contract law and substantial performance doctrine in Florida.
Substantial Performance: Perfect Performance Not Always Required
In contract law, substantial performance is a legal doctrine that holds that precise performance is not always required to satisfy a party’s obligations under a commercial agreement. Florida follows the contract law doctrine of substantial performance.
In the 1992 case of Ocean Reef Club, Inc. v. UOP, Inc, the U.S. District Court for the Southern District of Florida articulated the doctrine. As explained by the court, the contract law doctrine of substantial performance holds that less than full performance may be sufficient if it is “so nearly equivalent” as to not constitute a material breach.
In other words, the legal doctrine of substantial performance allows non-perfect performance to be “good enough” to fulfill the terms of a contract so long as any issues are not “material” to the underlying agreement.
Precise Performance Can Be Bargained for: The Perfect Tender Rule
Although Florida follows the substantial performance contract law doctrine, the state is also a party to the Uniform Commercial Code (UCC). The UCC has an important contract provision known as the ‘perfect tender rule.’ The perfect tender rule holds that a buyer of goods has the right to demand “perfect performance” from a seller. A buyer may be justified in rejecting goods that fail to conform to “perfect tender” requirements.
Language Matters: Always Review the Specific Terms of a Contract
Contract disputes are complicated. Whether or not non-perfect performance is good enough to satisfy the substantial performance doctrine in Florida depends on many different factors, including the conduct of the parties and the precise language of the agreement. With contract disputes, the terms of the contract matter. A close review of the agreement is required. If you are involved in a dispute over a contract and substantial performance is an issue, an experienced Clearwater, FL business lawyer can protect your rights and interests.
Schedule a Confidential Consultation With a Business Law Attorney in Clearwater
At Clearwater Business Law, our Clearwater business lawyer is an experienced advocate for clients. If you have any specific questions about contract law or the doctrine of substantial performance, we are here to help. Give us a call at (727) 785-5100 or connect with us online to set up your strictly confidential consultation. We provide business law services throughout Pinellas County, including in St. Petersburg, Largo, Pinellas Park, Dunedin, Tarpon Springs, Safety Harbor, Lealman, and Seminole.