What is performance of a divisible contract?

A divisible contract is one that has multiple parts or is divided up into segments. Each segment exists and can be completed independently. That is, each segment has duties that require completion. An installment contract is an example of a divisible contract. Each installment has duties or obligations that must be completed. Performance of one segment does not relieve a party from the obligation to perform the other segments. Further, breach of one segment does not excuse performance of the other segments by the parties.

• Example: I enter into a road construction contract that has three separate and distinct duties of completion. I complete the first phase by constructing a specific stretch of road that entitles me to compensation. I have significant delays in constructing the second stretch of road. I have materially breached this divisible portion of the contract. I still have the duty to complete and be compensated for the third divisible contract.

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