Lloyd's Maritime and Commercial Law Quarterly
THE RIGHT TO CURE DEFECTIVE PERFORMANCE
Antonia Apps*
A defective performance under a contract will not always entitle the aggrieved party to terminate the contract for breach. If the defaulting party can offer a subsequent performance in accordance with the contract within the time permitted for performance and in the absence of an anticipatory repudiation, the aggrieved party is bound to accept it. It will be argued that the nature and scope of the right to cure are determined by the operation of the remedies of defence of refusal to perform and termination. Prior to the expiry of the time for performance under the contract, the remedy or defence of refusal to perform controls the parties’ obligations, which are only suspended by a defective performance. The defaulting party has until the end of this period to offer a subsequent tender, unless there has been an earlier repudiation by the defaulting party, or an acceptance of the defective performance by the aggrieved party. This article concludes that English law should not follow the American Uniform Commercial Code provision which extends the right to cure beyond the contract period.
It is often assumed that when a party to a contract tenders a defective performance and that performance is justifiably rejected by the aggrieved party, the contract is thereby terminated for breach. This assumption will not always be true, for the defaulting party is entitled to offer a subsequent tender within the time permitted for performance, which, if it is in accordance with the contract, the aggrieved party is bound to accept. This common law rule, which gives the defaulting party the right to cure defective performance, has been established in England for over a century1 and has recently been approved by the House of Lords.2 In no case, however, has the nature of the rule been explained, nor has there been any attempt to articulate
* B.C.L. (Oxon.), LL.M. (Harv.). I wish to thank Professor G. H. Treitel for his many helpful comments in relation to this topic. The following abbreviations are used for the books specified: Benjamin (Benjamin’s Sale of Goods, 4th edn, London 1992); Chitty (Chitty on Contracts, 25th edn, 1983); Goode (Goode, Commercial Law, London, 1982); Treitel (The Law of Contract, 8th edn, London, 1991); Treitel, Remedies (Remedies for Breach of Contract: A Comparative Account, Oxford, 1988).
1. The case most often cited in support of the rule is Borrowman Phillips & Co. v. Free & Hollis (1878) 4 Q.B.D. 500 but there is earlier authority: Tetley v. Shand (1871) 25 L.T. 658, considered, infra, fn. 90. See Benjamin, para. 12–044, fn. 29.
2. Motor Oil Hellas (Corinth) Refineries S.A v. Shipping Corp. of India (The Kanchenjunga)
[1990] 1 Lloyd’s Rep. 391.
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