## Facts

- A publisher contracted to supply written bar-review course materials to a bar review company under a three-year installment contract.
- The contract required delivery of a criminal procedure outline supplement no later than May 1, 1993.
- The contract contained a notice-and-cure provision allowing termination only if the breaching party received written notice of breach and failed to cure within 30 days after receipt.
- The publisher delivered the supplement on June 3, 1993, about one month late.
- The bar review company withheld payments allegedly due for later years, asserting it had treated the delay as a material breach and cancelled the agreement.
- The bar review company claimed it mailed letters warning that delay past May 1 would be treated as a material breach and later cancelling the contract, but the publisher never received them.
- The publisher sued for unpaid contract amounts; the bar review company counterclaimed for damages allegedly caused by the late delivery.

## Issues

1. Whether the bar review company effectively terminated the contract by providing the contractually required written notice of breach and an opportunity to cure.
2. Whether the one-month late delivery in an installment contract substantially impaired the value of the whole contract, permitting cancellation under U.C.C. § 2-612(3).

## Decision

- Judgment for the publisher on its contract claim; the bar review company’s counterclaim was denied.
- The bar review company did not comply with the notice-and-cure clause because its purported written notices were not received as required under New York law.
- The late delivery did not substantially impair the value of the entire three-year installment contract, so cancellation of the whole contract was not justified.

## Legal Principles

- A contractual notice-and-cure clause that conditions termination on the breaching party’s receipt of written notice is enforced; failure to provide effective notice bars termination.
- Under New York law, notice is “received” when it comes to the recipient’s attention or is duly delivered to the recipient’s place of business.
- Under U.C.C. § 2-612(3), an installment contract may be cancelled only if a nonconformity or default substantially impairs the value of the whole contract; substantial impairment is a question of fact.
- A short delay in performance that is ultimately cured and does not defeat the overall purpose of a multi-year installment contract generally does not justify cancelling the entire agreement.

## Conclusion

The court held that the buyer remained obligated to pay under the three-year contract because it failed to give effective written notice and opportunity to cure, and because a one-month delivery delay did not substantially impair the value of the entire installment contract.


Emanuel Law Outlines, Inc. v. Multi-State Legal Studies, Inc., 899 F. Supp. 1081 (S.D.N.Y. 1995)