A party who substantially performs a contract may recover the contract price minus costs incurred by the nonbreaching party to receive full performance. Which statement best captures this rule?

• A. A They may recover nothing
• B. B They may recover the full contract price
• C. C They may recover the contract price minus the costs incurred
• D. D They may recover only incidental damages

Answer: (C)

Substantial performance means the performing party has completed enough of the contract to be entitled to payment, with only minor defects. When that happens, the performing party can recover the contract price, but the amount is reduced by the costs the nonbreaching party incurred to obtain full performance or to cure the defects. This ensures the nonbreaching party is compensated for the benefit they received, minus the extra costs they had to incur to finish the work.

So the correct idea is that the party may recover the contract price minus the costs incurred to receive full performance. The other options would either give no recovery, the full price despite defects, or only incidental damages, which doesn’t reflect the diminution for cure or completion costs.