Notice of Default (California)

CALIFORNIA NOTICE OF DEFAULT AND OPPORTUNITY TO CURE

California Practice Notes (Choose Applicable Track)

Track A — Commercial contract default. Use the letter below for breaches of commercial contracts (services, supply, license, lease of goods, commercial real property lease, promissory note secured or unsecured). It serves as a pre-litigation demand and a contractual notice of default where the contract requires notice and opportunity to cure.

Track B — Deed of trust / residential mortgage default. Do NOT use this general template. Use a statutory Notice of Default recorded in the county recorder's office pursuant to Cal. Civ. Code § 2924, together with required pre-NOD contact (§ 2923.55) and Homeowner Bill of Rights compliance. This requires specialized foreclosure counsel.

Track C — UCC Article 9 secured transaction (personal property collateral). In addition to notice of default, creditor must provide the "Notification of Disposition of Collateral" under Cal. Com. Code §§ 9611–9614 at least 10 days before any disposition (for non-consumer transactions). Use the UCC notice below in conjunction with this letter.

Relief from forfeiture. Cal. Civ. Code § 3275 allows a party in default to obtain relief from forfeiture upon making the other party whole. A court has discretion to grant relief where the default was not grossly negligent, willful, or fraudulent.

Cal. Code Civ. Proc. § 726 (One-Action Rule). A secured creditor holding real property collateral may pursue only ONE action — generally, judicial or nonjudicial foreclosure. Suing on the underlying note without exhausting the security may waive the security.

Cal. Civ. Code § 2856 (Antideficiency / Guarantor Waivers). Statutory antideficiency protections (Cal. Code Civ. Proc. §§ 580a, 580b, 580d, 726) may bar a deficiency judgment after nonjudicial foreclosure. Guarantor waivers must comply with § 2856.

[LAW FIRM OR CREDITOR LETTERHEAD]

VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED
AND VIA EMAIL TO: [____________________]

Date: [__/__/____]

[DEFAULTING PARTY NAME]
[ADDRESS]

Re: Notice of Default and Demand for Cure Under [CONTRACT NAME]; California Pre-Litigation Notice

Dear [NAME]:

This letter constitutes formal notice of default (this "Notice of Default") under the [CONTRACT NAME] dated [__/__/____] (the "Contract"), between [CREDITOR / NON-BREACHING PARTY NAME] ("Obligee") and you ("Obligor"). This Notice of Default is given pursuant to [Section ____ of the Contract / Cal. Civ. Code § 1511] and shall serve as formal notice and demand for cure.

1. The Contract

1.1 Obligor and Obligee entered into the Contract on [__/__/____]. The Contract is governed by California law.

1.2 Obligee has performed or tendered all material obligations under the Contract and has satisfied all conditions precedent to Obligor's performance under Cal. Civ. Code § 1439.

2. Events of Default

Obligee hereby notifies Obligor of the following Events of Default (collectively, the "Defaults"):

2.1 [Monetary Default]. Obligor has failed to pay the sum of $[____________________] due and owing under the Contract as of [__/__/____], consisting of:

• Principal past due: $[____________________]
• Interest accrued through [__/__/____] at [____]% per annum (or the default rate of 10% per annum under Cal. Civ. Code § 3289(b)): $[____________________]
• Late charges: $[____________________]
• Other: $[____________________]

2.2 [Non-Monetary Default]. Obligor has failed to [DESCRIBE], in breach of Section [____] of the Contract.

2.3 [Covenant Breach]. Obligor has failed to maintain [________________________________] as required by Section [____].

2.4 [Cross-Default]. A default under [RELATED AGREEMENT], if any, constitutes a cross-default under Section [____] of the Contract.

3. Cure Period and Demand

3.1 Cure Period. Pursuant to Section [____] of the Contract, Obligor has [____] days from the date of its receipt of this Notice to cure the Defaults (the "Cure Period"), expiring on [__/__/____] (the "Cure Deadline").

3.2 Specific Cure Requirements. To effect a valid cure, Obligor must, on or before the Cure Deadline:

(a) Pay the full sum of $[____________________] in immediately available funds by wire transfer to the account specified in Exhibit A, plus continuing interest at the rate of $[____________________] per day until paid;

(b) Complete the non-monetary performance described in Section 2.2 above;

(c) Provide Obligee with evidence, reasonably satisfactory to Obligee, of cure of all non-monetary Defaults; and

(d) Deliver a written certification, signed under penalty of perjury under California law (Cal. Code Civ. Proc. § 2015.5), confirming full cure.

3.3 No Partial Cure. Cure of fewer than all the Defaults identified herein shall not prevent the exercise of remedies as to uncured Defaults.

3.4 Accord and Satisfaction — Cal. Civ. Code § 1526. Any partial tender marked "payment in full" or similar language is governed by Cal. Civ. Code § 1526 and will not constitute an accord and satisfaction unless strictly complying with the statutory notice procedure. Obligee may retain any such tender, cross out conditional language, and apply it to the Outstanding Amount without prejudice.

4. Consequences of Failure to Cure

If Obligor fails to cure the Defaults in full on or before the Cure Deadline, the following consequences shall occur automatically, without further notice (unless additional notice is required by the Contract or by California law):

4.1 Acceleration. All sums owing under the Contract, including unaccrued future installments, shall become immediately due and payable, to the extent acceleration is authorized under Section [____] of the Contract and permitted under California law.

4.2 Termination. Obligee shall have the right to terminate the Contract in whole or in part, subject to Cal. Civ. Code § 3275 (relief from forfeiture).

4.3 Remedies at Law and Equity. Obligee will pursue any and all available remedies, including:

(a) Suit for damages under Cal. Civ. Code § 3300 in the Superior Court of California, County of [____________________];
(b) Specific performance under Cal. Civ. Code § 3384 (if money damages are inadequate);
(c) Injunctive relief under Cal. Code Civ. Proc. §§ 526, 527;
(d) Writ of attachment under Cal. Code Civ. Proc. §§ 483.010 et seq. for liquidated commercial claims over $500;
(e) Recovery of prejudgment interest at 10% per annum under Cal. Civ. Code § 3289(b);
(f) Post-judgment interest at 10% per annum under Cal. Code Civ. Proc. § 685.010; and
(g) Reasonable attorney fees and costs under the Contract and Cal. Civ. Code § 1717, which shall be enforced reciprocally.

4.4 UCC Article 9 Remedies (If Applicable). If the Contract is secured by personal property collateral, Obligee reserves the right to exercise all remedies of a secured party under Cal. Com. Code Division 9, including:

• Peaceful repossession under § 9609 (self-help, without breach of peace);
• Commercially reasonable disposition under § 9610;
• Collection directly from account debtors under § 9607;
• Acceptance of collateral in full or partial satisfaction under § 9620; and
• Suit for deficiency, subject to applicable limitations.

A separate "Notification of Disposition of Collateral" under Cal. Com. Code § 9611 will be served at least ten (10) days before any disposition.

4.5 Real Property Security (If Applicable). If the obligation is secured by a deed of trust on real property, Obligee will proceed by nonjudicial foreclosure under Cal. Civ. Code §§ 2924–2924k or judicial foreclosure, subject to the "one-action rule" of Cal. Code Civ. Proc. § 726 and the antideficiency statutes (§§ 580a, 580b, 580d).

5. Statute of Limitations

The applicable limitations period is four (4) years for written contracts under Cal. Code Civ. Proc. § 337, six (6) years for promissory notes under Cal. Com. Code § 3118, and two (2) years for oral contracts under § 339. Obligor's acknowledgment of the debt or partial payment may restart the limitations period under Cal. Code Civ. Proc. § 360.

6. Preservation of Rights

6.1 No Waiver. Obligee has not waived, and does not waive, any Default, any prior breach, or any right, power, or remedy. Any prior forbearance by Obligee shall not be deemed a waiver of future performance or a course of dealing.

6.2 Reservation. All rights and remedies of Obligee under the Contract, at law, in equity, or by statute are expressly reserved and are cumulative.

6.3 Strict Compliance. Obligee hereby requires strict compliance with all terms of the Contract going forward.

7. Litigation Hold

This Notice of Default serves as formal notice that litigation is reasonably anticipated. Obligor is required to preserve all documents, electronically stored information, communications, metadata, and tangible things relating to the Contract and the Defaults. See Cedars-Sinai Medical Center v. Superior Court, 18 Cal. 4th 1 (1998).

8. Settlement Discussion Availability

Obligee remains willing to discuss a commercially reasonable forbearance or modification in exchange for partial cure and additional collateral or guarantees. Please direct any response to the undersigned by [__/__/____]. Any such discussions are subject to Cal. Evid. Code § 1152.

Govern yourself accordingly.

Very truly yours,

[CREDITOR / COUNSEL SIGNATURE BLOCK]
[ATTORNEY NAME], Esq.
CA Bar No. [____________________]
[LAW FIRM NAME]

Exhibit A — Wire Instructions
cc: [GUARANTORS, if any] — Notice to guarantors is given pursuant to Section [____] of each Guaranty and pursuant to Cal. Civ. Code §§ 2787–2855.

Sources and References

• Cal. Civ. Code §§ 1439, 1511, 1526, 1657, 1717, 2787–2856, 2923.4 et seq., 2924 et seq., 3275, 3289, 3294, 3300, 3384
• Cal. Com. Code §§ 9607, 9609, 9610, 9611–9614, 9620, 3118
• Cal. Code Civ. Proc. §§ 337, 339, 360, 483.010 et seq., 526, 527, 580a, 580b, 580d, 685.010, 726, 2015.5
• Cal. Evid. Code §§ 413, 1152
• Cedars-Sinai Medical Center v. Superior Court, 18 Cal. 4th 1 (1998)