Performance under protest: Overview, definition, and example
What is performance under protest?
Performance under protest refers to a situation where a party continues to fulfill its obligations under a contract, even though it disagrees with certain terms or actions involved in the performance. By performing under protest, the party makes it clear that while they are still carrying out the required tasks or services, they do not accept or agree with a specific part of the agreement, or they are doing so under duress, disagreement, or a legal dispute. This protest may be made in writing or verbally, and it serves to preserve the party’s right to challenge certain terms or conditions at a later time.
For example, a contractor may continue to work on a construction project, but if they believe that changes to the scope of work are unreasonable, they may continue their work "under protest" while reserving the right to dispute those changes later.
Why is performance under protest important?
Performance under protest is important because it allows a party to continue fulfilling its contractual obligations without waiving its right to challenge specific terms or conditions later. This is particularly useful in situations where one party believes they are being treated unfairly or that the contract terms are being violated but needs to perform to avoid breaching the agreement or facing penalties. It ensures that the party's rights to dispute are preserved while still honoring the agreement's requirements.
For businesses, performing under protest can protect them from potential legal action for non-performance while allowing them to assert their rights in future disputes. For contractors, service providers, or other parties, it can help maintain cash flow and avoid delays while reserving the option to challenge unfair or improper terms.
Understanding performance under protest through an example
Let’s say a supplier is providing goods to a retailer, but the retailer unilaterally changes the delivery terms, demanding a faster shipment schedule. The supplier believes the new terms are unreasonable, but to avoid breaching the contract or causing a delay in deliveries, the supplier continues to fulfill the orders under protest. By doing so, the supplier can still challenge the change in terms at a later time without being penalized for non-compliance.
In another example, a construction contractor may be asked to carry out additional work beyond the scope of the original contract. If the contractor feels that the additional work should be paid for separately but agrees to perform it to avoid contract delays, they might state that they are doing so "under protest," preserving their right to seek additional compensation or challenge the request in the future.
An example of a performance under protest clause
Here’s how a clause related to performance under protest might appear in a contract:
“The Contractor shall perform the Work as directed by the Owner, but if the Contractor believes that the Owner’s request for changes to the scope of work is unreasonable or outside the terms of the contract, the Contractor may continue to perform under protest. This protest will not constitute a waiver of the Contractor’s right to seek compensation or other remedies through legal channels or dispute resolution processes.”
Conclusion
Performance under protest allows a party to continue fulfilling their contractual obligations while preserving their right to dispute specific terms or conditions at a later time. This concept is especially useful in situations where one party believes the other is acting outside the bounds of the agreement but cannot afford to stop or delay performance. By performing under protest, the party can protect their legal rights while avoiding breach of contract claims, ensuring that they can address the dispute appropriately at a later stage.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.