When is a contract considered materially completed?

A contract is considered materially completed when the contracting parties have fulfilled their primary obligations under the terms of the contract, and the work has been completed to the extent that it can be effectively used for its intended purpose. Final acceptance signifies that the owner or client has accepted the work as being completed according to the contract specifications. At this point, the obligations of the contractor are generally considered fulfilled, even if there may be minor items still pending.

Signing of the contract merely marks the beginning of the contractual obligations and does not imply that work has been completed. Similarly, passing inspections may indicate that the work is compliant with applicable standards, but it does not alone imply that the entire contract has been fulfilled or accepted. Finally, while paying invoices is a part of contract performance, payment does not define completion of the contractual work itself. In effect, final acceptance is a clear and direct marker of when material completion is achieved, validating that the project's output is satisfactory per the agreed terms and conditions.