O.C.G.A. § 11-2-609 (2019)
Right to adequate assurance of performance
(1) A contract for sale imposes an obligation on each party that the other’s expectation of receiving due performance will not be impaired. When reasonable grounds for insecurity arise with respect to the performance of either party the other may in writing demand adequate assurance of due performance and until he receives such assurance may if commercially reasonable suspend any performance for which he has not already received the agreed return.
(2) Between merchants the reasonableness of grounds for insecurity and the adequacy of any assurance offered shall be determined according to commercial standards.
(3) Acceptance of any improper delivery or payment does not prejudice the aggrieved party’s right to demand adequate assurance of future performance.
(4) After receipt of a justified demand failure to provide within a reasonable time not exceeding 30 days such assurance of due performance as is adequate under the circumstances of the particular case is a repudiation of the contract.
History
Code 1933, § 109A-2-609, enacted by Ga. L. 1962, p. 156, § 1.
Annotations
Law reviews. For article discussing applicability of right to adequate assurance of perfor-
mance provision of Uniform Commercial Code to construction contracts, see 28 Emory L.J. 335 (1979). For article, “Contract Litigation and the Elite Bar in New York City, 1960-1980,” see 39 Emory L.J. 413 (1990).
JUDICIAL DECISIONS Party-to-the-transaction rule. - For a discussion of the party-to-the-transaction rule as a defense to the holder in due course status, see Design Eng’g, Constr. Int’l, Inc. v. Cessna Fin. Corp., 164 Ga. App. 159, 296 S.E.2d 195, 1982 Ga. App. LEXIS 2739 (1982). Finance company furnishing forms to dealer. - A finance company which, although furnishing forms and instructions to the dealer, had no other connection with the dealer and through whom the dealer was not required to finance the equipment, was not a party to the transaction and there was no breach of warranty under O.C.G.A. § 11-2-609. Design Eng’g, Constr. Int’l, Inc. v. Cessna Fin. Corp., 164 Ga. App. 159, 296 S.E.2d 195, 1982 Ga. App. LEXIS 2739 (1982). Oral request by seller that appellee sign financing statements which would have materially altered terms of contract by placing a lien on equipment being sold did not constitute compliance with O.C.G.A. § 11-2-609, and, consequently, appellee’s refusal to comply with request did not authorize appellant to suspend delivery of equipment. Automated Energy Sys. v. Fibers & Fabrics of Ga., Inc., 164
Ga. App. 772, 298 S.E.2d 328, 1982 Ga. App. LEXIS 2938 (1982). No request for adequate assurances found. - Purchaser did not establish as a matter of law that the purchaser had made a demand on a supplier for adequate assurances under O.C.G.A. § 11-2-609(1) prior to the purchaser’s breach of an agreement. A reasonable jury could have found that an email inquiring whether there was a production issue with allegedly defective products constituted a writing that demanded adequate assurance. Advanced BodyCare Solutions, LLC v. Thione Int’l, Inc., 615 F.3d 1352, 2010 U.S. App. LEXIS 17742 (11th Cir. 2010). Attempt to cancel order as anticipatory breach of contract. - A buyer’s attempt to cancel a sale order is not an anticipatory breach of the contract where the seller refuses to cancel and asks for adequate assurance of performance, both parties proceed as if the attempt to cancel has never taken place, the seller does not pursue any of its remedies under O.C.G.A. § 11-2-610, and the conduct of the parties over the ensuing months manifests an implicit understanding that such a repudiation has been retracted without injury.
Wahnschaff Corp. v. O.E. Clark Paper Box Co., 166 Ga. App. 242, 304 S.E.2d 91, 1983 Ga. App. LEXIS 2116 (1983). Anticipatory repudiation not found. - Swearing out criminal warrant against buyer of ship as result of buyer’s
unauthorized cruise and obtaining restraining order prohibiting buyer from boarding ship does not amount to anticipatory repudiation. R.C. Craig, Ltd. v. Ships of Sea, Inc., 345 F. Supp. 1066, 1972 U.S. Dist. LEXIS 12788 (S.D. Ga. 1972).
RESEARCH REFERENCES Am. Jur. 2d. 67 Am. Jur. 2d, Sales, §§ 511-519. Am. Jur. Pleading and Practice Forms. 6 Am. Jur. Pleading and Practice Forms, Commercial Code, § 2:580. C.J.S. 77A C.J.S., Sales, § 208. U.L.A. Uniform Commercial Code (U.L.A.) § 2609. ALR. Right of party who has once refused to
perform to have specific performance of contract, 2 A.L.R. 416. Right of seller to rescind or refuse further deliveries upon the buyer’s failure to pay for instalments, 14 A.L.R. 1209; 75 A.L.R. 609. Sales: what constitutes “reasonable grounds for insecurity” justifying demand for adequate assurance of performance under UCC § 2-609, 37 A.L.R.5th 459.