UNLOCKING CONTRACT LAW
Discharge of a Contract
(see Chapter 15 of Unlocking Contract Law, Third Edition)
'The doctrine of substantial performance has rendered entire completion clauses in
contracts pointless'. Critically discuss.
In answering an essay question you should
• Interpret what the question is asking by breaking the question down to its key words
• Identify the relevant information and law
• Evaluate, analyse and explain
• Offer a reasoned conclusion.
Keywords: Doctrine of substantial performance; entire completion (also known as entire
contract) clauses
Relevant law: Cutter v Powell (1795) 6 Term Rep 320, Hoenig v Isaacs [1952] 2 All ER 176,
Bolton v Mahadeva [1972] 1 WLR 1009
Evaluation: The question requires that the student addresses the operation of and
justifications for entire completion clauses and of the doctrine of substantial performance.
Contracts that require a contract to be performed fully before payment is due were recognised
early in English law (Cutter v Powell). However, their strict application in cases like Arcos Ltd
v E A Ronaasen & Son [1933] AC 470 and Re Moore & Co and Landauer & Co's Arbitration
[1921] 2 KB 519, led to unjust results. To counter the potential for entire completion clauses to
lead to injustice the courts developed the doctrine of substantial performance in H Dakin & Co
v Lee [1916] 1 KB 566 and Hoenig v Isaacs. The doctrine of substantial performance requires
that performance that has, for all intents and purposes, been completed, should generate a
right to payment even if there are minor flaws, costs of which should be deducted from the
contractually stipulated price. The effect of the doctrine therefore is to allow payments when
the work is practically, but not technically, one hundred per cent finished. No specific
percentages for completion are specified in the case law to signify when work has been
substantially completed. This will be assessed on the circumstances of each case, as in
Bolton v Mahadeva. The way the doctrine of substantial performance has been defined
makes it compatible with an entire contracts clause.
Conclusion: The statement offered by the question is not accurate. While an entire contract
clause will not be operational if the work is substantially completed, it will still prevent payment
if work is incomplete to a significant degree. It will still therefore offer added incentive to a
contractor to complete the work fully.
Unlocking Contract Law Third Edition
© Ioannis Glinavos 2011