California Commercial Code

§ 10401

COM § 10401 Effective Jul 15, 1991Div. 10 · Ch. 4

Statute text

(a)A lease contract imposes an obligation on each party that the other’s expectation of receiving due performance will not be impaired.

(b)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 or she has not already received the agreed return.

(c)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.

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Legislative history

Amended by Stats. 1991, Ch. 111, Sec. 33. Effective July 15, 1991.