2012 Pennsylvania Consolidated Statutes
Title 13 - COMMERCIAL CODE
Chapter 2A4 - Performance of Lease Contract: Repudiated, Substituted and Excused
Section 2A401 - Insecurity: adequate assurance of performance

                               CHAPTER 2A4
                PERFORMANCE OF LEASE CONTRACT: REPUDIATED,
                         SUBSTITUTED AND EXCUSED

     Sec.
     2A401.  Insecurity: adequate assurance of performance.
     2A402.  Anticipatory repudiation.
     2A403.  Retraction of anticipatory repudiation.
     2A404.  Substituted performance.
     2A405.  Excused performance.
     2A406.  Procedure on excused performance.
     2A407.  Irrevocable promises: finance leases.

        Enactment.  Chapter 2A4 was added July 9, 1992, P.L.507,
     No.97, effective in one year.
     § 2A401.  Insecurity: adequate assurance of performance.
        (a)  General rule.--A lease contract imposes an obligation on
     each party that the other's expectation of receiving due
     performance will not be impaired.
        (b)  Demand for adequate assurance of performance.--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 has not already received the agreed return.
        (c)  Failure to provide adequate assurance of performance.--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.
        (d)  Reasonableness and adequacy between merchants.--Between
     merchants, the reasonableness of grounds for insecurity and the
     adequacy of any assurance offered must be determined according
     to commercial standards.
        (e)  Effect of acceptance of nonconforming delivery or
     payment.--Acceptance of any nonconforming delivery or payment
     does not prejudice the aggrieved party's right to demand
     adequate assurance of future performance.

        Cross References.  Section 2A401 is referred to in sections
     2A402, 2A403 of this title.