Performance is actually completing the deal according to the terms given in the contract. For example, you want to buy that snazzy looking 1998 Ferrari at your local dealer's clearance sale. Your dealer, Mr. X, offers to sell you that slick-looking Italian car if you pay him $97,000. After a bit of bargaining, you agree to the terms and get the car at a reduced price of $96,995, signing on the dotted line. A contract has been accepted. Mr. X, your car dealer, will deliver the 1997 Ferrari and then you pay him the balance due. The dealers delivery of the car and your payment of $96,995 are the performance of the contract.
Both parties must live up to their end of the bargain in the contract to have closure. In other words, until both parties have properly performed under the contract, the contract remains open.