MBE Rules · Contracts
Adequate Assurance of Performance
UCC §2-609
The rule
On reasonable grounds for insecurity, a party may demand written adequate assurance and suspend performance; failure to provide assurance within 30 days is a repudiation.
In plain English
The rule allows a party to request written assurance of performance from the other party if they have reasonable grounds to feel insecure about that party's ability to fulfill their contractual obligations. If the other party fails to provide this assurance within 30 days, it is considered a repudiation of the contract, allowing the first party to suspend their own performance.
Worked example
A contractor is concerned that a supplier will not deliver materials on time due to recent financial troubles. The contractor requests written assurance from the supplier regarding the delivery schedule. When the supplier fails to respond within 30 days, the contractor is entitled to treat the contract as repudiated and can stop their work.
Memory hook
No assurance, no performance – 30 days to show you mean it!
The trap
Exams may present scenarios where a party feels insecure but fails to specify reasonable grounds, leading students to overlook the necessity of justification for demanding assurance.
How examiners test it
Questions often involve a party expressing doubt about another's performance, requiring candidates to identify whether the grounds for insecurity are reasonable and the implications of failing to provide assurance.
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