Seller's Right to Cure

Quite a few options are available for the MBE writers to test the right to cure in Contracts.  In explaining this further it's important to note a few differences between installment contracts and single-delivery contracts.

The right to reject performance is far more limited in an installment contract than it is in a single-delivery contract.  Under the UCC, the traditional rule is the "perfect tender rule" whereby the buyer can choose to reject performance if the goods or delivery fail in any way to conform to the agreement. Not so in installment contracts. In installment contracts, an installment can be rejected only if the nonconformity substantially impairs the value of that installment and if the installment cannot be cured.  The entire installment contract is breached only if the nonconformity substantially impairs the value of the entire contact.

Let's first address the topic of cure in the context of single-delivery contracts. If the buyer has rejected goods because of defects in a single-delivery contract, the seller may within the time originally provided for performance cure by giving reasonable notice of the intention to cure and by then making a new tender of conforming goods that the buyer must then accept.

On the MBE, though, it's important to note when the seller can cure even beyond the original contract time in single-delivery contracts. If the buyer rejects a tender of nonconforming goods that the seller reasonably believed would be acceptable, then the seller upon reasonable notice to the buyer will have a reasonable amount of time beyond the original contract time to tender conforming goods to the buyer. A seller will generally have had reasonable cause to believe that its tender of nonconforming goods would be acceptable if the seller is able to show that trade practices or prior dealings with the buyer led the seller to that belief or if the seller could not have known of the defect even upon reasonable care to discover any defects.

The seller's right to cure in an installment contract differs from the seller's right to cure in a single-delivery contract. It's a bit simpler here: in an installment contract, a defective shipment cannot be rejected if the defect can be cured.