Many contracts contain a clause requiring a notice of default and opportunity to cure prior to filing suit or demanding arbitration. For a contract with such a clause, before an action can be taken, the party claiming the other has breached an agreement must: 1) send a notice describing the way(s) in which the party is in default of the agreement; 2) provide an opportunity to cure the default; 3) wait the ascribed period of time for the defaulted party to cure; and 4) file suit or demanding arbitration only if the other party fails to cure its default.
“The common meaning of ‘cure’ is to remedy, restore, remove, or rectify … and as the term relates to defaults, ‘cure’ means to restore matters to the status quo ante.”[1] The object of a notice of breach and opportunity to ‘cure’ is to give a party another chance to perform substantially and a second chance to perform according to the contract. The cure requires performance to the level of substantial performance under the contract.[2]
Fairness dictates that the opportunity to “cure” be more than illusory. A party must be given time and a real opportunity to cure prior to termination.[3] “The right of a breaching party to be given an opportunity to cure its alleged material breach is an ancient equitable principle intended to: (1) prevent forfeiture by termination; (2) allow the breaching party to mitigate damages, (3) avoid similar future deficiencies in performance, and (4) promote the informal settlement of disputes.”[4] In fact, where a party is not given more than an illusory opportunity to cure, there is no breach.[5]
In a contract with a cure requirement, the opportunity to actually cure the default is essential to the contract. Therefore, when one party prevents another from performing an essential task under an Agreement—like the cure—the other party is excused from performing.[6] The opportunity to cure becomes illusory and unattainable, and the complaining party may not maintain an action for breach for its own failure to allow the other to perform.
[1] Matter of Clark, 738 F.2d 869, 871 (7th Cir. 1984).
[2] 8 Catherine M.A. McCauliff, Corbin on Contracts, § 36.7 at 349 (1999).
[3] See Restatement Second, Contracts § 241; II Farnsworth on Contracts §§ 8.17, 8.18 (2d ed 1998).
[4] 5 Bruner & O’Connor Construction Law § 18:15 Principle Of Cure And Its Implications Upon Materiality (June 2016).
[5] Burras v. Canal Const. and Design Co., 470 N.E.2d 1362, 1367 (Ind. Ct. App. 1st Dist. 1984) (because the subcontractor “was not given an opportunity to remedy any alleged defects, any incidence of defective performance did not constitute a breach of the construction contract”).
[6] Chamani v. Mackay, 124 Nev. 1457, 238 P.3d 800 (2008) (citing Cladianos v. Friedhoff, 69 Nev. 41, 45–46, 240 P.2d 208, 210 (1952)).
Hon. Jay Young (Ret.) is a retired judicial officer with decades of experience presiding over complex civil litigation matters. Following a distinguished career on the bench, Judge Young now serves as a mediator, arbitrator, and court‑appointed special master, and discovery referee. Judge Young brings a disciplined, impartial, and results‑oriented approach to dispute resolution. Judge Young is based in Nevada and accepts appointments statewide and nationally, subject to agreement or court order. He can be reached at 855.777.4557 or info@armadr.com
Known for judicial temperament, analytical rigor, and practical problem‑solving, Judge Young assists litigants and counsel in resolving high‑stakes disputes efficiently and with integrity and employing best practices. He is recognized by U.S. News and World Report’s publication Best Lawyers as Arbitration Lawyer of the Year.