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A is corrent because under the doctrine of substantial performance, a contract obligation may be discharged even though the performance tendered was not in complete conformity with the terms of the agreement. Under this doctrine, if it can be shown that the defect in performance was only minor in nature, a good-faith effort was made to conform completely with the terms of the agreement, and if the performing party is willing to accept a decrease in compensation equivalent to the amount of the minor defect in performance, the contractual obligation will be discharged. Since Kent did not make a good-faith effort to conform to the terms of the agreement, but in fact intentionally breached it, their obligation will not be discharged and they will lose all rights under the contract.
B is incorrect because the damages in question are substantial in relation to the contract amount; thus, Kent cannot base their suit on the doctrine of substantial performance.
C is incorrect because Kent did not make a good-faith effort to conform completely with the contract; thus, Kent cannot base their suit on the doctrine of substantial performance.
D is incorrect because the law does not demand literal performance of contracts, but will allow the discharge of an obligation to a contract when it can be shown that the defect in performance was only minor in nature, a good-faith effort was made to conform completely with the agreement, and if the performing party is willing to accept a decrease in the compensation equivalent to the amount of the minor defect in performance.