Letter from Buyer Demanding Adequate Assurances from Seller
Summary
This letter can be used by a buyer of goods seeking assurance from a seller that the seller will perform its contractual duties under the sales of goods agreement between the parties. The template includes practical guidance and drafting notes. The letter is drafted pursuant to Section 2-609 of the Uniform Commercial Code ("UCC"), which addresses the right to receive adequate assurance of performance, and can be used when a buyer is not confident that the seller will deliver the goods promised pursuant to the terms of their agreement. The demand letter must set forth the basis for buyer's insecurity, which must be reasonable and made in good faith given the specific facts and circumstances. This letter covers an agreement for the sale of goods (the UCC does not cover agreements that are predominantly for the provision of services). The Restatement (Second) of Contracts § 251, however, replicates Section 2-609 of the UCC and, additionally, many states have expanded the right to demand reasonable assurance to non-UCC contracts. To the extent an agreement is subject to specific industry and/or state laws, practitioners should also ensure that the letter complies with any additional legal requirements. For additional information, see Anticipatory Repudiation and Adequate Assurance of Future Performance, for a sample response letter from a seller, see Letter from Seller Responding to Buyer's Demand for Adequate Assurance.