Legal Definitions - Option to Cure

The term Option to Cure refers to a legal right that a seller may have, particularly under contracts for the sale of goods, to correct a delivery or performance that does not fully meet the contract's requirements.

When a buyer rejects goods because they are not exactly what was agreed upon (a concept sometimes called "perfect tender"), the seller might still have an opportunity to fix the problem. This option is available if the original deadline for the seller to perform their part of the contract has not yet passed. If the seller successfully remedies the defect or replaces the non-conforming goods within the allowed timeframe, they are generally not considered to have breached the contract.

Here are some examples illustrating the Option to Cure:

• Scenario 1: Incorrect Product Specification

  A restaurant orders a specific model of commercial oven from a supplier, specifying it must be a "Model X-500" with a particular BTU rating. The supplier delivers a "Model X-400," which has a lower BTU rating. The restaurant immediately rejects the delivery because it's not the specified model. The contract states that the oven must be delivered by the end of the month, and it is currently only the 15th. The supplier, realizing the error, promptly offers to pick up the incorrect oven and deliver the correct "Model X-500" within two days, well before the end-of-month deadline.

  This illustrates the Option to Cure because the initial delivery was non-conforming (not the "perfect tender" specified in the contract). However, since there was still ample time remaining before the contractual performance deadline, the supplier had the right to correct their mistake and deliver the proper oven, thereby avoiding a breach of contract.

• Scenario 2: Minor Flaw in Custom Goods

  A marketing agency orders 500 custom-designed t-shirts for an upcoming promotional event, with a firm delivery date of October 20th. On October 18th, the t-shirts arrive. Upon inspection, the agency discovers that 20 of the shirts have a slight smudge on the printed logo, making them unsuitable for distribution. The agency rejects these 20 shirts. The t-shirt manufacturer immediately offers to reprint and deliver the 20 flawed shirts by the morning of October 20th, ensuring the agency has the full order of perfect shirts before their event.

  This demonstrates the Option to Cure because the initial delivery contained defective items, meaning it wasn't a "perfect tender." Despite the buyer's rejection of the flawed shirts, the seller had the opportunity to rectify the issue by replacing them before the final contractual delivery date, thus fulfilling their obligation without being in breach.