The Pros and Cons of Opportunity to Cure Provisions in Contracts

When it comes to a breach of contract, the process may seem simple and straightforward. You have a contract. There is a breach, or violation of the terms of the agreement. And then the non-breaching party sues for breach of contract.

Of course, it is more complex than that. One way it can get more complex is when a contract has what is known as an opportunity to cure provision. Whether having that provision is good or bad for you is something that you should discuss with your business law attorney before including or excluding it from your agreement.

What is the Opportunity to Cure?

An opportunity to cure provision is a part of a contract that gives a party in breach the chance to “correct” the breach within a specified amount of time. If the breach is cured, there is no breach of contract and thus no damages can be had and the contract will be deemed to have been completed.

Benefits of Providing Cure

Why would you want to give a party in breach the chance to correct an error or a breach of that contract?

One reason is to avoid litigation. Think of an opportunity to cure provision as giving someone “one last warning” before a lawsuit is filed. Often, a party in breach may be able to correct that breach, to no financial harm to the non breaching party, and is willing to do so, if given that one last chance to avoid a lawsuit.

If you are the party in breach or possibly in breach, the opportunity to cure can give you the chance to try to head off litigation or resolve a potential conflict before a lawsuit is filed. It is usually better to have someone say “you are in breach, fix it or else,” as opposed to just serving you with lawsuit papers.

Cure provisions can also open the door to negotiations between the parties, giving them the opportunity to try to come to some resolution before a lawsuit is filed.

Cons to Cure Provisions

One negative to an opportunity to cure provision is that if you are the non-breaching party, you can’t just run to the courthouse to sue. You will have to provide the other side the time stated in the contract to correct that breach.

So, if you have a contract where performance on a specified time deadline is absolutely vital, or where you don’t think that curing would be possible, an opportunity to cure provision may not be right for you.

Notice Provisions

If you are going to give a breaching party the contractual right to fix that breach before a lawsuit, your contract will have to have a notice of default provision as well. Usually, the time stated to cure a breach starts at the time the breaching party is notified of the breach.

What should your business law contract say? Let the West Palm Beach commercial litigation lawyers at Pike & Lustig help you with your contracts and agreements in your business today.

Source:

floridabuilding.org/fbc/publications/fact_sheets_0307/constructiondefects060305revised.pdf