What does actual performance in a contract refer to?

Actual performance in a contract refers to the complete fulfillment of the obligations as outlined in the contract. This means that each party involved has carried out their promises fully and exactly as specified, which leads to the termination of the contract. In this context, actual performance indicates that the intended contractual duties have not only been started but are fully executed in accordance with the agreed terms.

This concept is crucial in contract law because it establishes that the contract's purpose is accomplished, thus discharging both parties from their contractual responsibilities. When all obligations are met satisfactorily, it signifies that the agreement has been honored, and the parties can move forward without any further liabilities related to that contract.

In contrast, the other options present scenarios that do not meet the requirement of actual performance, such as negotiating better terms or providing alternatives, which pertain more to contract modification or negotiation rather than fulfilling the original contractual terms. Similarly, partial fulfillment does not satisfy the criteria for actual performance, as it indicates that not all obligations have been conducted as per the contract agreement.