2A401 - Insecurity: adequate assurance of performance. - Pennsylvania Statutes

CHAPTER 2A4 PERFORMANCE OF LEASE CONTRACT: REPUDIATED, SUBSTITUTED AND EXCUSED Sec. 2A401. Insecurity: adequate assurance of performance. 2A402. Anticipatory repudiation. 2A403. Retraction of anticipatory repudiation. 2A404. Substituted performance. 2A405. Excused performance. 2A406. Procedure on excused performance. 2A407. Irrevocable promises: finance leases. Enactment. Chapter 2A4 was added July 9, 1992, P.L.507, No.97, effective in one year. § 2A401. Insecurity: adequate assurance of performance. (a) General rule.--A lease contract imposes an obligation on each party that the other's expectation of receiving due performance will not be impaired. (b) Demand for adequate assurance of performance.--If reasonable grounds for insecurity arise with respect to the performance of either party, the insecure party may demand in writing adequate assurance of due performance. Until the insecure party receives that assurance, if commercially reasonable the insecure party may suspend any performance for which he has not already received the agreed return. (c) Failure to provide adequate assurance of performance.--A repudiation of the lease contract occurs if assurance of due performance adequate under the circumstances of the particular case is not provided to the insecure party within a reasonable time, not to exceed 30 days after receipt of a demand by the other party. (d) Reasonableness and adequacy between merchants.--Between merchants, the reasonableness of grounds for insecurity and the adequacy of any assurance offered must be determined according to commercial standards. (e) Effect of acceptance of nonconforming delivery or payment.--Acceptance of any nonconforming delivery or payment does not prejudice the aggrieved party's right to demand adequate assurance of future performance. Cross References. Section 2A401 is referred to in sections 2A402, 2A403 of this title.