(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 thirty days such assurance of due performance as is adequate under the circumstances of the particular case is a repudiation of the contract.
Source: L. 65: p. 1331, § 1. C.R.S. 1963: § 155-2-609.
ANNOTATION
Law reviews. For article, "Executory Contracts in Bankruptcy: Protecting the Fundamental Terms of the Bargain", see 54 U. Colo. L. Rev. 507 (1983).
A seller could not suspend performance where his behavior was not such as to bring him within the provisions of this section. Scott v. Crown, 765 P.2d 1043 (Colo. App. 1988).
Whether a party to a contract has reasonable grounds for insecurity and the adequacy of any assurance of performance are questions of fact for the jury. Colo. Interstate Gas Co. v. Chemco, Inc., 854 P.2d 1232 (Colo. 1993).