exali Glossary
Your encyclopedia of technical terms used in the insurance industry
The insurance industry is full of technical terms—from insurance policies and obligations to recourse claims. To help you keep track of everything, the exali glossary explains the main insurance terms in a simple, understandable, and practical way.
In the exali glossary, you will find not only definitions, but also practical examples, legal information, and references to the appropriate insurance coverage. This way, you always know where the risks lie—and how to protect yourself against them.
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Substandard Performance
Substandard performance refers to the inadequate fulfillment of a contractually agreed service. This means that although the work or service is performed, it does not meet the agreed requirements or is faulty.
When is performance considered substandard?
Performance is generally considered substandard if:
- The result does not meet the contractually agreed quality standards.
- Assurances or contractual ancillary obligations are violated.
- Work results are faulty, incomplete, or unusable.
- Deadlines or scope of services are not met and this affects quality.
Examples of substandard performance
- An agency delivers a corporate design that does not comply with the previously agreed CI specifications.
- A developer programs an interface incorrectly, causing the customer's system to fail.
- A photographer delivers images in a resolution too low, even though print quality was agreed in the contract.
Warning letter for substandard performance
A warning is a formal notice to the contractor that the service provided is defective and must be rectified.
- It must specify the defect in concrete terms.
- It should include a deadline for rectification.
- It may be a prerequisite for taking further legal action (e.g., reduction, withdrawal, or damages).
Rights and obligations in the event of substandard performance
Obligations of the contractor:
- Rectification or elimination of the defect
- Delivery of a defect-free result
- Provision of the agreed service in the required quality
Rights of the client:
- Demand rectification
- Reduction of the price in the event of irreparable defects
- Withdrawal from the contract in the event of serious substandard performance
- Claim damages if a financial disadvantage has arisen
Term: Substandard Performance
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