A roofer agrees to install a $40,000 roof using 30-year shingles. He uses an identical-looking 25-year shingle and finishes on schedule. The homeowner refuses to pay anything. The answer turns on substantial performance, materiality of breach, and cost-to-cure, three doctrines the exam ties together in a single fact pattern.
A party who performs in good faith with only minor deviation has substantially performed and can recover the contract price minus the cost to cure. The doctrine exists because the law refuses to let a payor escape an entire bill over a trivial flaw. Three requirements: (1) good-faith effort, (2) minor deviation, (3) not willful.
KEY: Substantial performance does NOT apply to willful breaches. A contractor who deliberately substitutes inferior materials forfeits the doctrine even if the dollar deviation is small.
Recovery is contract price minus the lesser of cost to cure or diminution in value. If tearing out non-conforming pipe would cost $30,000 and the actual market-value loss is $2,000, courts award $2,000.
Common mistakes
- Treating any deviation as a material breach. Substantial performance forgives minor good-faith deviations. A $400,000 job with one wrong wood species recovers price minus cost to cure. Trap: "Hayes recovers $0."
- Applying common law consideration rules to a UCC modification. A goods contract drops from $90,000 to $80,000 with no new consideration. UCC §2-209 enforces it if good faith. Trap: "Modification is unenforceable for lack of consideration."
- Confusing accord with satisfaction. Until satisfaction occurs, the original duty is only suspended. Trap: "Original debt is discharged the moment the accord is signed."
Bottom line
- Substantial performance: minor good-faith deviation recovers contract price minus the lesser of cost to cure or diminution in value
- Conditions: precedent (gates duty), concurrent (simultaneous), subsequent (extinguishes duty); failure excuses performance but is not breach
- Common law modifications need new consideration; UCC §2-209 modifications need only good faith
- Accord suspends the original duty; satisfaction discharges it, and breach of the accord lets the obligee choose which to enforce
Exam shortcut
When a question shows partial performance with a small defect, default to substantial performance and the lesser-of-two measure unless the breach was willful. For a goods-contract modification, skip the consideration question, UCC §2-209 only requires good faith. Memory aid: "Novation Frees, Delegation Doesn't": only a three-party release escapes original liability.
The full lesson (about 2,203 words, 15 min read) adds 2 worked examples, all 6 common mistakes, a self-check, free in the app.
Learning objectives
- II.B2
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