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What is a Notice of Contract Default?
A Notice of Contract Default is used to provide written notice to a person or organization that is in default or breach of contract. Notices of Contract Default notify the defaulting party that they have failed to hold up their end of a contract. The notice provides a period of time ("grace period") for the defaulting party to remedy the problem.
Ideally, the Notice of Contract Default may prompt the defaulting party to fulfill its obligations under the contract. Otherwise, it will at least serve as evidence that the non-defaulting party provided the required warning to the defaulting party in the event that the contract is later terminated because of the default.
Making your own Notice of Contract Default with Rocket Lawyer is as simple as answering a few questions. Get started now!
When to use a Notice of Contract Default:
- You want to provide written notice that a person or organization is in breach of contract. For example, failure to make a payment or perform a service as required by the contract.
- You would like to give a final warning before taking legal action against a defaulting party.
Sample Notice of Contract Default
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| Re: |
Dated:
This is to notify you that you are now in default of your obligations under the above written contract as a result of You have days in which to cure this default. If you do not remedy the default within the allotted time,
me us me us at the above address be contacted by phone at . e-mail address is . A fax can be sent to .
Sincerely,
About Notices of Contract Default
Learn about how to provide notice of a default or breach of contract
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How does a Notice of Contract Default work?
A Notice of Contract Default is a straightforward document used in various scenarios to inform an individual, often a borrower or contractor, of their failure to adhere to contractual obligations.
For example, in the realm of real estate, non-judicial foreclosure states see lenders issue a Notice of Default when a borrower fails to meet their payment commitments. In other industries, this notice can also be sent to contractors who have not fulfilled their service obligations.
Within the lender-borrower relationship, the Notice of Contract Default marks the initial action taken when a borrower falls behind on their payments. In cases like this, the document tends to be officially recorded at the county recorder's office or with the courts to act as a public notice of the borrower's default.
When it comes to contractors or service providers bound by contract, a Notice of Contract Default serves as an alert that they have not fulfilled their agreed-upon obligations. Another potential context is of a landlord-tenant association, in which the landlord can send one to deny the occupant access rights if rent or other fees remain unpaid.
The primary aim of this notice is to make the defaulting party aware of their failure to fulfill their commitments and, in turn, motivate them to address the issue. Non-compliance by the defaulting party provides the aggrieved party with the initial step toward recovering their losses through actions like foreclosure, eviction, or other legal remedies.
With Rocket Lawyer, writing your own Notice of Contract Default is simple – all you have to do is answer a few questions and we’ll take care of the rest. Get started now!
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When can I give a Notice of Contract Default?
Each contract is different. This means that there is no universal definition for "default" – or when it’s appropriate to give someone a Notice of Contract Default, as it varies from case to case.
Often, the contract itself defines what events or non-events are considered a default. In general, a default occurs whenever one party fails to fully meet its obligations, usually to perform a service or to make a payment by the deadline in the contract.
When one party defaults under a contract for the first time, or in a way that does not significantly impact the contract, that default does not necessarily entitle the non-defaulting party to immediately terminate the contract. Rather, it is recommended, and often required by many contracts, that a Notice of Contract Default be given along with an opportunity to cure or fix the issue.
If after a reasonable amount of time the problem is not corrected, then a Notice of Contract Termination or other legal action may be the next step. What constitutes a "reasonable" amount of time to cure the default varies according to the circumstances. If the amount of time is not specified in the contract, then it must be at least long enough to allow the defaulting party a chance to correct the problem.
If you have any questions about whether a Notice of Contract Default fits your specific situation, don’t hesitate to ask a lawyer.
Notice of Contract Default FAQs
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How do you write a Notice of Contract Default?
It is very simple to prepare a free Notice of Contract Default with Rocket Lawyer:
- Make the document - Answer a few general questions and we will do the rest.
- Send and share it - Discuss any legal questions with a lawyer.
- Sign and make it legal.
Using Rocket Lawyer to make your Notice of Contract Default is, in most cases, notably less expensive and less time-consuming than meeting and hiring your own attorney to draft the entire document on your behalf.
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Can I give an oral warning instead of a written default notice?
It is ultimately your decision. Although there may be some situations in which a verbal warning may be sufficient, it is highly recommended that every Notice of Contract Default be provided in writing. If a party is not performing as required in the contract, you want to document that in case there is a legal dispute over how to fix the situation. Sending a formal notice can also help motivate the defaulting party into action.
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How should I send the Notice of Contract Default?
The non-defaulting party should send the letter by certified or registered mail and should retain a copy of the letter for its files. Send the letter to the address specified in the contract. These precautions are taken so that you can prove that the other party has received the notice.
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Is a Notice of Contract Default a final step before more drastic legal action?
Not always. For instance, when talking about property, some lenders may use Default Notices as a last resort before foreclosure, while others could just be taking this step as protocol and looking at it as a way to work with the borrowers to bring the mortgage up to date within the grace period.
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