Find Me Funders
Right to cure
Also called cure period, grace period, cure right.
A contractual window in which a borrower may fix a default before the creditor can accelerate or enforce - present in some agreements and entirely absent from many commercial ones.
Drafted with AI assistance. Not yet independently checked. Nobody has verified the claims on this page against a source, so treat the figures and legal points as a starting point rather than as settled, and confirm anything you are about to act on. How we check things.
What it means
Where it exists, the clause specifies what may be cured, how long the window is, and what starts it. Most agreements that grant one distinguish between default types: a short window or none for payment defaults, a longer one for covenant and reporting defaults, and no cure at all for defaults treated as incurable - misrepresentation, insolvency filing, transfer of the business, or the granting of a prohibited lien.
Two details do most of the work. Whether the period runs from the event or from written notice, which can differ by weeks. And whether curing restores the agreement to good standing or merely stops that particular enforcement, leaving the default on record for cross-default purposes.
Larger credit agreements sometimes include equity cure rights, allowing a sponsor or owner to inject capital counted towards a failed financial covenant, usually capped in frequency.
Some state statutes impose their own notice and cure requirements for particular secured transactions or collateral types, independent of what the contract says, and those vary.
Where this one catches people
Many commercial advance and loan agreements contain no cure right at all - default is immediate and enforcement can follow the same day, with acceleration of the full balance. Where a cure period does exist, check whether it runs from the event or from the notice. If it runs from the event, a creditor that waits can hand you a notice with the window already closed, and that is not a drafting oversight.
Read next
Right to cure — common questions
What does right to cure mean?
A contractual window in which a borrower may fix a default before the creditor can accelerate or enforce - present in some agreements and entirely absent from many commercial ones.
Where does right to cure catch people out?
Many commercial advance and loan agreements contain no cure right at all - default is immediate and enforcement can follow the same day, with acceleration of the full balance. Where a cure period does exist, check whether it runs from the event or from the notice. If it runs from the event, a creditor that waits can hand you a notice with the window already closed, and that is not a drafting oversight.
Is right to cure the same as an interest rate?
Right to cure is defined above; if you are comparing it against a rate, check whether the two measures share a time dimension before you put them side by side.
Which products does right to cure apply to?
It is not specific to one product — it appears across the market.
Is there a worked example of right to cure?
Not on this entry. Where a term is arithmetic, the arithmetic is shown; this one is not primarily a calculation.
What else should I read alongside right to cure?
Acceleration clause, Confession of judgment, Covenant, Event of default, NSF fee.
Has this definition been checked?
Not yet. This entry is drafted and live, and the notice at the top says so. Confirm anything you are about to act on.
Is this legal advice?
No. It is a definition. What a clause does in your contract, in your state, is a question for a lawyer licensed where you are.
Can I suggest a term?
Yes — [email protected]. The glossary grows from what people are actually shown in contracts.