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[chapter_16]_vocab - Chapter 16 There are three levels of...

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Chapter 16 There are three levels of performance of a contract: complete, substantial, and inferior. Complete Performance - A situation in which a party to a contract renders performance exactly as required by the contract. Complete performance discharges that party’s obligations under the contract. Substantial Performance - Performance by a contracting party that deviates only slightly from complete performance. Substantial Performance occurs when there has been a minor breach of contract. Minor breach - A breach that occurs when a party renders substantial performance of his or her contractual duties. If the breaching party does not correct the breach, the non- breaching party can sue to recover damages by: (1) Deducting the cost to repair the defect from the contract price and remitting the balance to the breaching party or (2) Suing the breaching party to recover the cost to repair the defect if the breaching party has already been paid. Inferior performance - A situation in which a party fails to perform express or implied contractual obligations and impairs or destroys the essence of the contract. A material breach of a contract occurs when a party renders inferior performance. Material breach - A breach that occurs when a party renders inferior performance of his or her contractual duties. The nonbreaching party may either (1) Rescind the contract and recover restitution or (2) Affirm the contract and recover damages.
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