Entire Contract 2

Advantages & Disadvantage of Using Entire Contract

In my opinion, the use of entire contract tends to benefit the employer rather than for both parties. In the employer’s point of view, this kind of contract can be very beneficial for him. First of all, the employers can avoid paying contractors for their partly performed works. They also can use their allocated money for some other works first. Moreover, if there is a breach of contract, they may not pay the contractors for their uncompleted works, while they still can benefit from the performed works done by the contractors. The only disadvantage is that not all contractors want to deal with this kind of contract. Contractors willing to involve in this kind of contract are usually experience contractors.


The Doctrine of Substantial Performance

When a discharge of an entire contract occurs, the older reported cases such as Appleby v Myers [1867] and Whitaker v Dunn [1887] require complete performance by contractors as a condition precedent to his right of payment under an entire contract. If the contractors do not complete their work at the time of contract termination, then they cannot be able to claim their rights for services that they have done.

However the common law has since been modified by later judicial pronouncements which seem to be fairer to both parties. The doctrine of substantial performance is now been applied. It is said that a contractor who has substantially performed his obligations of the contract may claim on the contract for the agreed sum, though he remains liable in damages for his partial failure to fulfill his contractual obligations.

Therefore, substantial performance is an alternative principle to entire contract. This principle is relevant when a contractor’s performance is in some way deficient, through no willful act by the contractor, yet is so nearly equivalent that it would be unreasonable for the owner to deny the agreed upon payment. If a contractor successfully demonstrates substantial performance, the owner remains obligated to fulfill payment, less any damages suffered as a result of the deficiencies in workmanship by the contractor.


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