Legal Memorandum: Doctrine of Substantial Performance in MN

Issue: Under Minnesota law, what is the impact of a party’s hindrance of another party’s ‘performance’ of a contract?

The requirement of “performance” under a contract generally means “substantial performance.”  15 Williston on Contracts § 44:52 (4th Ed.).  As stated in this treatise:

The general rule with respect to compliance with contract terms where the contract is made for an agreed exchange of two performances, one of which is to be rendered first, is not strict compliance, but substantial compliance.  While at one time, the common law required strict and literal compliance with the terms of a contract, over time this was relaxed under the influence of courts of equity, so that today only substantial compliance with a contract’s terms is generally required.

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The doctrine of substantial performance is intended to protect the right to compensation of those who have performed in all material and substantive particulars, so that their right to compensation may not be forfeited by reason of mere technical, inadvertent, or unimportant omissions or defects.  Thus, the doctrine of substantial performance applies to construction, service, and employment contracts.