§ 25-2A-401. Insecurity: adequate assurance of performance. - North Carolina Statutes

Part 4.

PERFORMANCE OF LEASE CONTRACT:REPUDIATED, SUBSTITUTED, AND EXCUSED.

§ 25‑2A‑401. Insecurity: adequate assurance of performance.

(1)        A lease contractimposes an obligation on each party that the other's expectation of receivingdue performance will not be impaired.

(2)        If reasonablegrounds for insecurity arise with respect to the performance of either party,the insecure party may demand in writing adequate assurance of dueperformance.  Until the insecure party receives that assurance, if commerciallyreasonable, the insecure party may suspend any performance for which he has notalready received the agreed return.

(3)        A repudiation ofthe lease contract occurs if assurance of due performance adequate under thecircumstances of the particular case is not provided to the insecure partywithin a reasonable time, not to exceed 30 days after receipt of a demand bythe other party.

(4)        Between merchants,the reasonableness of grounds for insecurity and the adequacy of any assuranceoffered must be determined according to commercial standards.

(5)        Acceptance of anynonconforming delivery or payment does not prejudice the aggrieved party'sright to demand adequate assurance of future performance. (1993,c. 463, s. 1.)