Opportunity to Cure

An "Opportunity to Cure" clause in a payment context gives a party who has failed to make a required payment a specified period of time to remedy the default before the other party can declare a breach or take enforcement action. For example, if a payment is due on the 1st of the month but the clause provides a 10-day cure period, the paying party has until the 11th to make the payment without triggering default consequences. This clause is important because it acknowledges that payment delays sometimes occur due to administrative errors, banking delays, or temporary cash flow issues rather than intentional non-performance. By providing a grace period, the clause promotes business relationships and reduces the likelihood of contract termination over minor timing issues. However, the cure period must be clearly defined (specific number of days), and the clause should specify what happens if payment is not made within that window—typically, the creditor can then pursue remedies like late fees, interest, or contract termination.

If you are the party obligated to pay, negotiate for a reasonable cure period (typically 5-15 days depending on payment frequency and contract value) and ensure the clause clearly states that timely notice of non-payment is required before the cure period begins. If you are the party receiving payment, be cautious about cure periods that are too generous, as they delay your access to funds and remedies; consider including a requirement that the paying party must provide written notice of intent to cure and that repeated defaults (even if cured) can trigger termination rights. Always specify whether the cure period applies to all payment defaults or only the first occurrence.