What Is Contract Performance?

PERFORMANCE OF A CONTRACT
Discover everything you need to know about managing and tracking contract performance in
this Juro deep dive.
Getting a contract signed is one thing. Actually performing that contract is another. But
businesses often spend most of their time trying to get contracts over the line, and not enough
time thinking about how they’ll track and manage their obligations once they do.
In this definitive guide to contract performance, let’s run through what contract performance
means, and what businesses like yours can do to stay on top of your contractual obligations in
2023.
What is contract performance?
Contract performance is the process of fulfilling the promises made in a contract. For
parties to perform a contract successfully, they have to deliver the results they’ve promised in
the agreement, and usually within a certain timeframe.
Failing to do this will result in a contract not being performed, and likely a breach of contract,
too.
But contract performance isn’t just about what parties have agreed to do. It’s also about what
they’ve agreed not to do.
For example, a commercial contract might include terms that prohibit certain information
from being shared. Similarly, some employment contracts say that their employees can’t
moonlight, which essentially means having a second job.
Why is contract performance important?
Contract performance is important because it makes sure that all parties receive what they
originally expected from a contract, and that the partnership has run smoothly.
By doing this, contract performance also releases the parties from the contract, by discharging
it. This is called discharge of contract by performance, and it basically means that the contract
has ended because all of the parties’ contractual obligations are complete.
Contract performance also matters because failing to fulfil your contractual duties can land
you in legal trouble. Let’s explore the consequences of not performing your duties under a
contract in a bit more detail now.
What happens if you fail to perform your contractual obligations?

1. Risk of legal action
Not fulfilling your contractual obligations can have serious legal consequences.
Failing to perform your duties under a contract will often result in that contract being
breached. This means that the party you’re in the contract with can take legal action against
you for breaking the terms of the contract.
This legal action can quickly become expensive to fight, but it can also result in you having
to fork out even more money in the form of damages. These damages will be used to
compensate for your lack of performance, and any losses the other party has suffered as a
result of it.
2. Damage to relationships and reputation
Contract performance is also important when it comes to maintaining relationships with the
people you work for and with.
Even if your lack of performance doesn’t result in a contractual dispute, it can still discourage
parties from wanting to do business with you again. After all, businesses often rely on the
promises made in a contract. If you can’t stick to your part of the deal, they’ll need to look
for someone more reliable that can.
Poor contract performance means customers probably won’t renew their contracts, and
they’re even less likely to invest in additional products or services from you.
Types of contract performance
Before we explore what you can do to avoid these consequences and perform your contracts
successfully, it’s also useful to understand that there are different types of contract
performance. This is important because it determines how a contract will be discharged, and
what the parties’ legal position will be when it is.
These three types of contract performance are:
 Complete performance
 Substantial performance
 Breach of contract (aka non-performance)
1. Complete performance
Complete contract performance describes a situation where the parties have fulfilled all of
their duties under a contract. When one party has performed the contract in full, the other
party must do the same.
This is the best type of contract performance because it means that all expectations have been
met, and no legal action is required. Instead, the contract ends because the obligations have
been met in full already.
2. Substantial performance
Substantial contract performance describes when the main contractual obligations have

been performed, but a non-material obligation has not.
Non-material obligations are promises made as part of a contract, but they don’t form the
substance of the contract. While it can be annoying if these promises aren’t met, it doesn’t
necessarily undermine the purpose of the contract or result in a serious breach.
Instead, the contract can be discharged and any unmet promises can be compensated for.
3. Breach of contract
The final type of contract performance is actually non-performance, also known as a breach

of contract. We’ve explained this already, but a breach of contract occurs when parties have
failed to fulfil their main contractual obligations.
How to manage your contract performance
To recap: we’ve covered what contract performance means, and the consequences of not
performing your contractual obligations.
But for fast-scaling businesses managing lots of contracts, the biggest challenge can be
staying on top of your contractual obligations in the first place.
Fortunately, we have some top tips to make contract performance easier in 2023.
1. Centralize your contract storage
It’s hard to fulfil your contractual obligations if you don’t know what they are or where to
find them.
This is a common problem for businesses that have their executed contracts scattered across
local drives and filing cabinets. Different versions are shared in different places, each with
different access controls. This makes it almost impossible to track contracts and their
deadlines.
Instead, businesses should opt for a secure contract storage solution that helps them not just
store contracts safely, but also find them easily.
Juro’s all-in-one contract automation software is a great example of this, as Juro’s contract

repository allows teams to not only centralize where they store their contracts but also search
through them in seconds using OCR technology.
2. Capture your contract data accurately
It’s also important to capture the data in your contracts accurately to make sure that you’re
performing your contracts correctly. To do this, you’ll want to set up a system that allows
you to quickly review important details like:
 Contract type
 Contract owner
 Contract value
 Contract duration
 Obligation due dates
 Contract renewal deadlines
Lots of businesses manually extract this information from contracts and add it to a contract
management spreadsheet of some sort. This works, but it can be time-consuming and there’s
no guarantee that the data recorded is completely accurate.
It’s often faster, and more reliable, to automate this process. This is possible with
most contract management systems as they often pull the data captured in smartfields into
a contract dashboard automatically.
Again, Juro is a great example of this. Not only can Juro users customize their contract
templates to capture certain data, but they can also create customizable contract dashboards to
view this data at scale.
3. Set reminders for contract deadlines
Contract reminders are another great way to ensure contract performance.

Certain contract reminder solutions, including Juro, will allow you to customize who you
want to notify and how far in advance you’d like them to receive the notification. Juro users
can create contract reminders for any dates within the contract, meaning there’s no risk of
your team missing upcoming contract deadlines.

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PERFORMANCE OF A CONTRACT

What is contract performance?

Why is contract performance important?

What happens if you fail to perform your contractual obligations?

1. Risk of legal action

2. Damage to relationships and reputation

Types of contract performance

These three types of contract performance are:

 Breach of contract (aka non-performance)

Substantial contract performance describes when the main contractual obligations have

The final type of contract performance is actually non-performance, also known as a breach

How to manage your contract performance

1. Centralize your contract storage

Juro’s all-in-one contract automation software is a great example of this, as Juro’s contract

2. Capture your contract data accurately

 Obligation due dates

 Contract renewal deadlines

3. Set reminders for contract deadlines

Contract reminders are another great way to ensure contract performance.

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