| ||1. Right to performance in case of defective performance
This Article applies the general principles of Articles 7.2.1 and 7.2.2 to a special, yet very frequent, case of non-performance, i.e. defective performance. For the sake of clarity the Article specifies that the right to require performance includes the right of the party who has received a defective performance to require cure of the defect.
2. Cure of defective performance
Under the Principles cure denotes the right both of the non-performing party to correct its performance (see Article 7.1.4) and of the aggrieved party to require such correction by the non-performing party. This Article deals with the latter right.
The Article expressly mentions two specific examples of cure, namely repair and replacement. Repairing defective goods (or making good an insufficient service) is the most common case and replacement of a defective performance is also frequent. The right to require repair or replacement may also exist with respect to the payment of money, for instance in case of an insufficient payment or of a payment in the wrong currency or to an account different from that agreed upon by the parties.
Apart from repair and replacement there are other forms of cure, such as the removal of the rights of third persons over goods or the obtaining of a necessary public permission.
The right to require cure of a defective performance is subject to the same limitations as the right to performance in general.
Most of the exceptions to the right to require performance that are set out in Article 7.2.2 are easily applicable to the various forms of cure of a defective performance. Only the application of sub-paragraph (b) calls for specific comment. In many cases involving small, insignificant defects, both replacement and repair may involve “unreasonable effort or expense” and are therefore excluded.
A new car is sold which has a small painting defect which decreases the value of the car by 0.01 % of the purchase price. Repainting would cost 0.5% of the purchase price. A claim for repair is excluded but the buyer is entitled to require a reduction in the purchase price.