I’ve got a problem with the notion of “curing” breach of a contract obligation.
Consider the following language, which constitutes one of the elements of a definition of “Seller Default”:
the Seller breaches any obligation under this agreement and, if that breach is capable of being cured, fails to cure that breach in the 30 days after the Buyer notifies the Seller of that breach, except that if that breach is capable of being cured but not within 30 days and the Seller is using reasonable efforts to cure that breach promptly, that breach will not constitute a Seller Default if the Seller continues to use reasonable efforts to cure it and cures it no later than 90 days after the Buyer notifies the Seller of that breach;
But what does it mean to cure a breach? When is a breach capable of being cured? Here are three scenarios:
- Acme is under an obligation to deliver some equipment by September 26, 2013. Acme fails to do so; Acme has breached the obligation. Acme delivers the equipment on October 1, 2013. Has Acme cured its breach? No: to comply with the obligation, Acme would have had to meet the original deadline. There’s no way that it could go back in time to fix its failure to meet the deadline.
- Acme is under an obligation not to transfer the some shares. It nevertheless transfers the shares, so it’s in breach. It buys back the shares. Has it remedied its breach? No: you can’t unbreak an egg.
- Acme is under an obligation to clean the some premises to the satisfaction of WidgetCo no later than October 1, 2013. Acme announces on September 26, 2013, that it has done so, but WidgetCo isn’t satisfied. Is Acme in breach? I suggest that it’s preferable to consider that Acme isn’t in breach, as the deadline hasn’t passed, and I’ve seen caselaw to that effect. If Acme does some more cleaning so that WidgetCo is satisfied before the deadline, it will have complied with the deadline, so there would be nothing to cure. And even if you assume that Acme is in breach on September 26, why give Acme additional time beyond the October 1 deadline?
So I suggest that the notion of cure is more confusing than helpful. But I’m open to other ideas.