59.1-507.8 - Adequate assurance of performance. - Virginia Statutes

§ 59.1-507.8. Adequate assurance of performance.

(a) A contract imposes an obligation on each party not to impair the other'sexpectation of receiving due performance. If reasonable grounds forinsecurity arise with respect to the performance of either party, theaggrieved party may:

(1) demand in a record adequate assurance of due performance; and

(2) until that assurance is received, if commercially reasonable, suspend anyperformance, other than with respect to contractual use terms, for which theagreed return performance has not been received.

(b) Between merchants, the reasonableness of grounds for insecurity and theadequacy of any assurance offered is determined according to commercialstandards.

(c) Acceptance of any improper delivery or payment does not impair anaggrieved party's right to demand adequate assurance of future performance.

(d) After receipt of a justified demand under subsection (a), failure, withina reasonable time not exceeding thirty days, to provide assurance of dueperformance which is adequate under the circumstances of the particular caseis a repudiation of the contract under § 59.1-507.9.

(2000, cc. 101, 996.)