Defective Work and Offers to Cure #2: Do Contractors Have a Common Law Right to Cure?
As discussed in our earlier post, inFisher v. Rondo Pools, 1 CA-CV 18-0343 (Ariz. App. 2019), the court upheld a verdict finding a contractor that performed defective work did not materially breach its contract because it made “reasonable assurances that it would cure the alleged breach.” This, despite the parties’ contract apparently not giving the contractor an express right to cure. The court relied instead on the definition of “materiality” in the Restatement (2d) of Contracts, § 241(d), which states that an ability and willingness to cure the alleged breach can make the default immaterial.
Practically speaking, the right to demand a cure is usually invoked by an owner demanding a contractor cure its defaults within a specified time. But when a construction contract contains no cure provisions like the one in Rondo Pools, does the contractor have a right cure its defaults?
According to Bruner & O’Connor, 18:41, yes: “Cure is a fundamental common law right implied in every contract as a matter of law.”
The basis for this purported “common law right” is the same Restatement (2d) of Contracts provision relied on in Rondo Pools. This suggests the Restatement (2d) of Contracts, § 241(d) itself implies a right to cure: If an alleged breach is immaterial in part because the breaching party can and likely will cure it, then the nonbreaching party cannot terminate the contract and must allow the breaching party to cure. The practical effect of this provision may be that when a contractor offers to cure a defect, the contractor creates a de facto right to cure because his breach becomes immaterial. See also, McClain v. Kimbrough Constr. Co., 806 S.W.2d 194, 198-99 (Tenn. Ct. App. 1990) (holding that absent a contractual provision, a subcontractor had a right to cure so long as the subcontractor had not materially breached the contract under the Restatement (2d) of Contracts, § 241(d).).