§ 4-2.5-401 — Insecurity: Adequate assurance of performance

Colorado § 4-2.5-401

• Jurisdiction: Colorado
• Title 04: Uniform
• Art.: Leases

Text

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

(2) 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.

(3) 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 thirty days
after receipt of a demand by the other party.

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

(5) Acceptance of any nonconforming delivery or payment does not
prejudice the aggrieved party's right to demand adequate assurance of future
performance.

Legislative History

Source: L. 91: Entire article added, p. 297, � 1, effective July 1, 1992.