This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
The degree of compliance with the terms of the contract which is necessary to substantial performance depends in part upon the detail of performance which is provided for by such terms. The doctrine of substantial performance rests in part upon the theory that a contract should be construed reasonably and liberally.1 If performance is provided for in general terms, it is assumed that the parties intended some leaway in performance growing out of the practical difficulties of literal performance subject to compensation because of such deficiency. If the contract provides in detail as to the method of performance, the courts can not apply the doctrine of substantial performance so as to ignore such express provisions; and they can not compel one party to perform if the adversary party has failed to perform the covenants which are inserted with such detail as to show that strict performance thereof is intended to be precedent to the right of the obligor to recover.2 The doctrine of substantial performance is occasionally justified as a doctrine of construction, on the theory that a contract should be so construed as to give a just result,3 and that in the particular case in question it should not be so construed as to require a strict and literal performance.4
The doctrine of substantial performance was almost forced upon the courts by the practical operation of the doctrine of strict and literal performance, especially in jurisdictions in which no recovery in quasi-contracts could be had by one who was in default in the performance of a contract.5 In such jurisdictions a party who had not performed strictly and literally could not recover reasonable compensation for the value of the work done, the material furnished, and the like; since he could not recover on the contract where the doctrine of strict and literal performance was recognized, recovery of every sort was denied to one who had performed in good faith, but had deviated in some minor respect from literal performance. While the doctrine of substantial performance may thus be justified, its practical operation has probably erred as far on the one side as the doctrine of strict and literal performance erred on the other.
12 Bush v. Jones, 144 Fed. 942, 6 L. R. A. (N.S.) 774.
13 See Sec. 2576 et seq.
14 Hoglund v. Sortedahl, 101 Minn. 350, 112 N. W. 408.
1 See Sec. 2053.
2 Bush v. Jones, 144 Fed. 042, 6 L. R. A. (N.S.) 774.
3 See Sec. 2053.
4 Belworth v. Hassell, 4 Camp. 140.
In spite of the generally repeated formula of the courts that they will not make contracts for the parties, but that they will merely enforce the contracts which the parties have made for themselves, the combined action of the courts and the jury in applying the rule of substantial performance is frequently to compel a party who is not in default to pay practically the full contract price for something for which he bargained and which quite possibly he would not have agreed to accept at any price or upon any terms. The courts have admitted that they have adopted the doctrine of substantial performance without any strict regard to logic.6 The doctrine of substantial performance is said to be a "relaxation of the general rule out of the charity of the law."7 The actual working out of the doctrine has been that courts have "gone to very great length in compelling parties to go on with purchases, contrary to their original agreement and intention."8
If substantial performance exists, the question of acceptance by the adversary party, or of waiver by him of literal performance, is immaterial.9 The refusal of the adversary party to permit literal performance after substantial performance has been made, is said, however, to waive literal performance.10