Opportunity to cure: Overview, definition, and example
What is an opportunity to cure?
An opportunity to cure is a contractual provision that allows a party in breach of an agreement to correct or "cure" the violation within a specified timeframe before facing penalties, termination, or legal action. This clause is commonly found in commercial contracts, employment agreements, and lease agreements to prevent immediate enforcement actions over minor breaches.
For example, if a tenant fails to pay rent on time, the lease agreement may provide a five-day opportunity to cure, allowing the tenant to make the payment before eviction proceedings begin.
Why is an opportunity to cure important?
An opportunity to cure clause is important because it reduces conflicts, prevents premature contract termination, and allows businesses to maintain relationships. It gives the breaching party a fair chance to fix an issue before severe consequences, such as lawsuits or contract cancellations, take effect.
For businesses, this clause mitigates risks and fosters goodwill by ensuring that minor breaches do not immediately lead to financial or legal penalties. It also protects both parties from unintended consequences by allowing for reasonable dispute resolution.
Understanding an opportunity to cure through an example
Imagine a software company has a contract to provide IT support services to a corporate client. The contract states that failure to respond to service requests within 48 hours constitutes a breach. However, the contract also includes an opportunity to cure clause, allowing the software company seven days to resolve any service delays before the client can terminate the contract.
In another case, a manufacturer supplies goods to a retailer, but one shipment contains defective products. Instead of immediately canceling the contract, the retailer invokes the opportunity to cure, allowing the manufacturer 10 days to replace the defective goods. This prevents unnecessary contract disputes and maintains the business relationship.
An example of an opportunity to cure clause
Here’s how a clause like this might appear in a contract:
“In the event of a material breach of this Agreement by either Party, the non-breaching Party shall provide written notice of the breach and allow the breaching Party [X] days to cure the breach. If the breach is not cured within the specified period, the non-breaching Party shall have the right to terminate this Agreement or seek appropriate remedies.”
Conclusion
An opportunity to cure clause provides a structured way to resolve breaches before taking severe legal or financial actions. It promotes fairness, maintains business relationships, and prevents unnecessary contract disputes. By including this clause in agreements, businesses can protect themselves from abrupt terminations while ensuring compliance with contractual obligations.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.