In contract law, there must be consideration for the contract to be enforceable. In some contracts, this means that one party promises something in exchange for a performance from second party. The action of completing that performance fulfills the second party’s obligations in the contract. For example, one party may promise to pay another party $100 if a second party paints their house. The painting of the house is the performance required of the second party and doing so would complete their role in the contract. It is usually not necessary for the completed performance to be perfect; instead, the standard that must be met is substantial performance.
In some cases, a party who has made a valid contract and does not adequately perform their role in a contract. This is called a breach of contract. A breach might be that a party does not perform their role at all, performs it but with major defects, or that the party only performs a portion of their obligations, called partial performance. In some scenarios, a partial performance might be acceptable–especially if contract was divisible–though the compensation under the contract would be altered to reflect the level of performance. In other cases, however, partial performance does not entitle the breaching party to any compensation. Further, a breaching party may be required by a court to fulfill their obligations under a contract if there is no other way to make the situation just; this is called specific performance.
[Last updated in August of 2020 by the Wex Definitions Team]