Final payment and punch list items are often problems at the end of a project. Although the project is substantially complete, a property owner might refuse to make final payment based upon some relatively minor punch list work. When the contractor attempts to address the alleged issues, the property owner might deny the contractor access to the property and refuse to pay the balance of the contract price.
All contractors should be aware that they do have the right to enter the premises to cure defects and finish the contract if the job has been substantially completed. If the property owner unreasonably fails to allow a contractor to complete the project, the property owner is breaching the contract and this excuses the contractorís further performance. The contractor is entitled to receive the unpaid contract price, less the amount it would have cost the contractor to complete any legitimate punch list items.
As a general rule, the contractorís duty to perform is satisfied by "substantial performance," defined as the performance of everything necessary to fully accomplish the projectís purpose, with an allowance for some slight and unintentional defects which can be readily remedied or deducted from the contract price. Intentional deviations or substantial lack of performance are not allowed. As an example, if the project is a room addition and the property owner can reasonably occupy the addition and use it to its fullest extent, despite the minor punch list items, the job has been substantially performed. The property owner must either allow the contractor to remedy the defects, or otherwise pay the contractor the full balance of the contract price, less any amounts that it would cost the contractor to remedy the punch list items.