Legal Definitions - future performance

In legal terms, future performance refers to actions, duties, or obligations that parties have agreed to undertake or fulfill at a later date, rather than immediately upon the formation of a contract or agreement. It signifies that the agreed-upon tasks, deliveries, payments, or services are scheduled to occur at some point after the initial agreement is made.

• Example 1: Construction Contract
  Imagine a homeowner signs a contract with a construction company today to build a new deck. The contract specifies that construction will begin in six weeks and will take approximately two months to complete. The homeowner also agrees to make progress payments at specific milestones during the construction period.

  How it illustrates future performance: Both the construction company's obligation to build the deck and the homeowner's obligation to make the progress payments are examples of future performance. These actions are not happening today when the contract is signed; instead, they are scheduled to occur at various points in the weeks and months following the agreement.

• Example 2: Software Subscription Agreement
  A business enters into an agreement with a software provider for a one-year subscription to a cloud-based accounting system. The agreement is signed today, but the software access will be activated next Monday, and the monthly subscription fees will be charged at the beginning of each subsequent month.

  How it illustrates future performance: The software provider's duty to grant access to the software and maintain its functionality, as well as the business's obligation to pay the monthly subscription fees, constitute future performance. These are ongoing actions and payments that commence and continue after the initial contract signing.

• Example 3: Employment Offer
  An individual receives and accepts a job offer, signing an employment contract on a Friday. The contract states that their official start date for work is the following Monday, and their first paycheck will be issued two weeks after that.

  How it illustrates future performance: The employee's obligation to begin working on Monday and the employer's obligation to pay wages are both instances of future performance. While the agreement is finalized today, the actual performance of the work and the payment for that work are scheduled to begin and continue at future dates.