(b) That's wrong. Generally, a party to a contract is entitled to complete performance of all the terms of the contract. Anything less than this is a breach of contract. If there is only partial performance of a condition, the non-defaulting party would normally be entitled to terminate performance of the contract.
However, if partial performance is very close to complete performance, it is called substantial performance to distinguish it from other cases of partial performance. In the case of substantial performance the non-defaulting party is not permitted to terminate performance. Substantial performance of a condition must instead be treated as a minor breach of contract for which the appropriate remedy is an adjustment in the price payable, or a claim for damages.
In the present example, there has clearly been substantial performance of the contract by X. The shortfall in performance does not substantially deprive Z of an intended benefit of the contract. In the circumstances, Z would have to accept the chairs and tables and pay pro rata for them.