CACI 4524 Contractor’s Claim for Compensation Due Under Contract—Substantial Performance

California Civil Jury Instructions CACI

4524 Contractor’s Claim for Compensation Due Under Contract—Substantial Performance

[Name of defendant] claims that [name of plaintiff] did not fully perform all of the things that [he/she/nonbinary pronoun/it] was required to do under the [terms of the contract/plans and specifications], and therefore [name of defendant] did not have to [specify owner’s obligations under the contract, e.g., pay the contract balance]. [Name of plaintiff] claims that [he/she/nonbinary pronoun/it] did substantially all of the things required of [him/her/nonbinary pronoun/it] under the contract.

To succeed, [name of plaintiff] must prove all of the following:

1.That [name of plaintiff] made a good-faith effort to comply with the terms of the contract and did not willfully depart from them;

2.That [name of plaintiff] did not omit any essential requirement in the contract; and

3.That the [name of defendant] received essentially what the contract called for because [name of plaintiff]’s failures, if any, were so trivial that they could have been easily fixed.

If you find that [name of plaintiff] substantially performed the contract, the cost of completing unfinished work must be deducted from the contract price.

Directions for Use

This instruction is a variation of CACI No. 312, Substantial Performance. It should be used if the issue is whether the contractor performed all of the requirements of the construction contract, including the plans and specifications. If the owner withholds some or all of the contract price because it claims that the contractor did not perform the work completely or correctly, the contractor may assert that it “substantially performed.”

Sources and Authority

“ ‘At common law, recovery under a contract for work done was dependent upon complete performance, although hardship might be avoided by permitting recovery in quantum meruit. The prevailing doctrine today, which finds its application chiefly in building contracts, is that substantial performance is sufficient, and justifies an action on the contract, although the other party is entitled to a reduction in the amount called for by the contract, to compensate for the defects. What constitutes substantial performance is a question of fact, but it is essential that there be no wilful departure from the terms of the contract, and that the defects be such as may be easily remedied or compensated, so that the promisee may get practically what the contract calls for.’ ” (Posner v. Grunwald-Marx, Inc. (1961) 56 Cal.2d 169, 186–187 [14 Cal.Rptr. 297, 363 P.2d 313], original italics, internal citation omitted.)

“ ‘Substantial performance means that there has been no willful departure from the terms of the contract, and no omission of any of its essential parts, and that the contractor has in good faith performed all of its substantive terms. If so, he will not be held to have forfeited his right to a recovery by reason of trivial defects or imperfections in the work performed.’ ” (Connell v. Higgins (1915) 170 Cal. 541, 556 [150 P. 769], internal citation omitted.)

“What constitutes ‘substantial performance’ ‘is always a question of fact, a matter of degree, a question that must be determined relatively to all the other complex factors that exist in every instance.’ ” (Tolstoy Constr. Co. v. Minter (1978) 78 Cal.App.3d 665, 672 [143 Cal.Rptr. 570], internal citation omitted.)

“ ‘Whether, in any case, such defects or omissions are substantial, or merely unimportant mistakes that have been or may be corrected, is generally a question of fact.’ ” (Connellsupra, 170 Cal. at pp. 556–557, internal citation omitted.)

“ ‘The general rule on the subject of [contractual] performance is that “[w]here a person agrees to do a thing for another for a specified sum of money to be paid on full performance, he is not entitled to any part of the sum until he has himself done the thing he agreed to do, unless full performance has been excused, prevented, or delayed by the act of the other party, or by operation of law, or by the act of God or the public enemy.” [Citation.] … [I]t is settled, especially in the case of building contracts where the owner has taken possession of the building and is enjoying the fruits of the contractor’s work in the performance of the contract, that if there has been a substantial performance thereof by the contractor in good faith, where the failure to make full performance can be compensated in damages to be deducted from the price or allowed as a counterclaim, and the omissions and deviations were not willful or fraudulent and do not substantially affect the usefulness of the building for the purposes for which it was intended, the contractor may, in an action upon the contract, recover the amount unpaid of his contract price, less the amount allowed as damages for the failure in strict performance. [Citations.]’ ” (Murray’s Iron Works, Inc. v. Boyce (2008) 158 Cal.App.4th 1279, 1291–1292 [71 Cal.Rptr.3d 317].)

“ ‘[T]here is a substantial performance where the variance from the specifications of the contract does not impair the building or structure as a whole, and where after it is erected the building is actually used for the intended purpose, or where the defects can be remedied without great expenditure and without material damage to other parts of the structure, but that the defects must not run through the whole work so that the object of the owner in having the work done in a particular way is not accomplished, or be such that a new contract is not substituted for the original one, nor be so substantial as not to be capable of a remedy and the allowance out of the contract price will not give the owner essentially what he contracted for.’ ” (Murray’s Iron Works, Inc.supra, 158 Cal.App.4th at p. 1292.)

“The rule of substantial performance was intended to cover situations where the defects are slight or trivial, or where the imperfections do not affect a substantive part of the work, but it was not intended to cover cases where the departures or deviations from the plans are major, where it takes a major operation to remedy the defects, or where the work as constructed is of no real value.” (Bause v. Anthony Pools, Inc. (1962) 205 Cal.App.2d 606, 613 [23 Cal.Rptr. 265].)

“[A]lthough in a few minor and trivial matters the building did not strictly and technically comply with the terms of the contract, the departure was not willful nor intentional on the part of the defendant, and the defects were capable of being easily remedied to conform to the terms of the contract … . Thereupon the court concluded that the defendant was entitled to have the contract enforced in his favor, with an abatement … on the contract price on account of the defects found to exist … .” (Rischard v. Miller (1920) 182 Cal. 351, 352–353 [188 P. 50].)

“[The] performance rendered may be held to be less than substantial by reason of the accumulation of many defects, any one of which standing alone would be minor in character.’ ” (Tolstoy Constr. Co.supra, 78 Cal.App.3d at p. 673, footnote omitted.)

Secondary Sources

1 Witkin, Summary of California Law (11th ed. 2017) Contracts, §§ 843–844
1 California Construction Contracts, Defects, and Litigation (Cont.Ed.Bar) Ch. 5, Private Contracts: Disputes and Remedies, § 5.99
13 California Forms of Pleadings and Practice, Ch. 140, Contracts, § 140.23 (Matthew Bender)
5 California Points and Authorities, Ch. 50, Contracts, §§ 50.30, 50.31 (Matthew Bender)
27 California Legal Forms, Ch. 75, Formation of Contracts and Standard Contractual Provisions, § 75.230 (Matthew Bender)
2 Matthew Bender Practice Guide: California Contract Litigation, Ch. 22, Suing or Defending Action for Breach of Contract, 22.08[2], 22.16[2], 22.37, 22.69
Miller & Starr, California Real Estate 4th, §§ 27:103, 29:3 (Thomson Reuters)
Acret, California Construction Law Manual (6th ed.) § 1:54 (Thomson Reuters)
Bruner & O’Connor on Construction Law, § 18:12 (Thomson Reuters)