The Terrestrial Planet Finder Coronagraph (TPF-C) demands extreme wave front control and stability to achieve its goal of detecting earth-like planets around nearby stars. We describe the performance models and error budget used to evaluate image plane contrast and derive engineering requirements for this challenging optical system. We show that when the coronagraph is coupled to an 8 th -order band-limited mask, the performance is limited by shearing of the starlight beam across imperfect optics (a.k.a. beam walk), and that this in turn demands tight rigid body pointing, submilliarcsecond fine guiding, high-quality optics, and sub-micron positional stability of the optics including the secondary mirror. Additionally we show that the stability of low-order aberrations (focus, astigmatism, coma, and trefoil) is required to be ~ 2-4 Angstroms, while higher-order modes must remain stable to a few picometers.