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Neither party has a duty to perform until the other has performed or has tendered performance. Performance - when both parties have performed all of their obligations under the contract; Breach - when the obligations under the contract have been breached.A further exception exists where a court is satisfied that substantial performance is present. The traditional rule regarding contracts is that all parties must follow the terms of the contract or agreement precisely. Effect of (Non-)Performance. 1. Discharge: Full performance of a duty discharges the duty. Kent (1921) has served as the dominant law school case on the Substantial Performance Doctrine for over a century.