Right to cure: Overview, definition, and example
What is the right to cure?
The right to cure refers to a provision in a contract that gives a party the opportunity to fix or correct a breach or failure to perform within a specified time frame, before the other party can take further legal action, such as terminating the agreement or seeking damages. This right is commonly included in contracts to allow the breaching party a chance to remedy any issues or deficiencies that may have arisen during the performance of the contract. The purpose of this provision is to encourage resolution of disputes without immediately resorting to drastic measures, such as termination.
For example, if a supplier delivers goods that do not meet the agreed-upon specifications, the buyer may give the supplier the right to cure by allowing them a certain period to fix the problem before taking further action.
Why is the right to cure important?
The right to cure is important because it provides a fair opportunity for a party to address any issues or breaches in performance without immediately facing the consequences of breach, such as termination of the contract or legal action. This provision fosters a cooperative approach to problem-solving and encourages parties to resolve disputes amicably, which can be more efficient and cost-effective than litigation. For businesses, it helps maintain relationships with vendors, customers, or other contracting parties, while ensuring that both parties have the chance to uphold the contract and avoid unnecessary conflict.
Understanding the right to cure through an example
Let’s say a construction company is hired to build a commercial building, but upon inspection, the work does not meet the quality standards specified in the contract. The contract includes a right to cure clause, which allows the construction company to correct the deficiencies within 30 days before the client can terminate the agreement or seek damages. In this case, the construction company has the opportunity to fix the issues and fulfill the contract as originally agreed.
In another example, a software provider delivers a product that does not function as promised. The client invokes the right to cure, giving the provider 15 days to fix the bugs and deliver a working version of the software before the client can pursue other remedies, such as a refund or legal action.
An example of a right to cure clause
Here’s how a right to cure clause might appear in a contract:
“In the event of any breach or failure to perform by either party, the non-breaching party shall notify the breaching party in writing. The breaching party shall have [insert number] days to cure the breach or failure to perform, provided that such cure is completed within the specified time. If the breach is not cured within the cure period, the non-breaching party may terminate the agreement or seek other legal remedies.”
Conclusion
The right to cure is an essential contract provision that offers a party the opportunity to correct any breach or failure to perform within a reasonable period before more severe consequences are imposed. This provision supports fair and practical dispute resolution, allowing the parties to resolve issues without immediately resorting to termination or legal action. Including a right to cure clause in contracts helps protect the interests of both parties, promotes cooperation, and can help maintain business relationships by providing a fair opportunity to resolve disputes.
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.