Updated 2026-05-19

Cure period

Time to fix a contract problem before the other side can use certain default rights.

Why it matters

A cure period can reduce operational risk, but some defaults are excluded from cure entirely. Understanding which breaches have cure periods and which trigger immediate default helps sellers assess how much margin they have for operational errors. Cure periods are most commonly found for payment-based defaults, such as failure to maintain minimum volume. Material misrepresentation, fraud, or insolvency may not have a cure period—the factor may exercise remedies immediately. Sellers should negotiate for cure periods on operational defaults where reasonable correction is feasible.

How it appears in contracts

Cure periods appear in the Events of Default section of the factoring agreement, typically as a qualifier on certain default events. Common structure: if a default is capable of being cured, the seller has a defined number of days after receiving written notice to remedy the breach. The agreement should specify what notice is required to start the cure clock and what documentation is needed to confirm cure. Some defaults, such as insolvency, bankruptcy filing, or fraud, are explicitly excluded from any cure right.

Related terms

• Event of default
• Default rate
• Cross-default
• Notice period