ENTIRE CONTRACT, SUBSTANTIAL PERFORMANCE

The older reported cases such as Appleby v Myers (1867)LR CP651 and Whitaker v Dunn (1887) 3 TLR 602 require complete performance by a promisor as a condition precedent to his right of recovery under an entire contract.

However the rigours of the common law has since been modified by later judicial pronouncements. It is now established by the doctrine of substantial performance that a promisor who has substantially performed his side of the contract may sue on the contract for the agreed sum, though he remains liable in damages for his partial failure to fulfill his contractual obligations.

At common law, 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.

Case Law:

Zainun Ali, JCA observed in Nirwana Construction Sdn Bhd v JKR NS(2008) that in the absence of express provision to exclude Substantial Performance, a contract cannot be regarded as Entire Contract

Gunn Chit Tuan, J. observed in KP Kunchi Raman v Goh Brothers Sdn Bhd (1978) 1 MLJ 89 in considering whether there had been substantial performance, it was relevant to take into account both the nature of the defect and the proportion between the cost of rectifying them and the contract price.