Also known as: grace periods · cure period
Written by attorneys — see sources below.
2 senses
A contractual period during which a party may cure a late payment or performance without triggering penalties, forfeiture, or acceleration of the full obligation. The period is often set by the agreement or statute and requires timely cure to reinstate the original terms.
A contractual period during which a party may cure a late payment or performance without triggering penalties, forfeiture, or acceleration of the full obligation. The period is often set by the agreement or statute and requires timely cure to reinstate the original terms.
A one-year window following an inventor's public disclosure or certain commercialization activities during which a patent application may still be filed without the disclosure barring patentability.
1 common questions
The patent grace period allows an inventor one year after public disclosure to file an application without the disclosure becoming prior art. The contractual version merely postpones penalties for late performance and does not create new substantive rights.
A one-year window following an inventor's public disclosure or certain commercialization activities during which a patent application may still be filed without the disclosure barring patentability.
Each sense below has its own examples, sources, and questions.
Gino Giordano missed three monthly payments on his mortgage held by Granite Holdings. Granite mailed a notice stating the full balance would accelerate thirty days later. Within that window Gino tendered only the arrears plus fees. Because the cure occurred before acceleration took effect, the mortgage reinstated on its original terms and foreclosure was barred.
Gina Griffin owned an unused mineral interest subject to a state lapse statute. The statute extinguished interests unused for twenty years but gave owners a two-year grace period to file a claim and preserve the interest. Gina recorded her statement of claim before the grace period expired, so her interest remained intact rather than reverting to the surface owner.
In 1971 the Indiana Legislature enacted the Dormant Mineral Interests Act. The Act provided that any severed mineral interest unused for a period of twenty years would be extinguished and its ownership would revert to the then-current surface owner unless the mineral owner filed a statement of claim in the county recorder's office. The statute took effect on September 2, 1971, and included a two-year grace period allowing owners of already unused interests to preserve them by filing claims. A mineral interest was deemed used if minerals were produced, rents or royalties were paid, or taxes were paid on the interest. Owners could also preserve interests by filing statements of claim, and an exception allowed owners of ten or more interests in the same county who inadvertently omitted some to file a supplemental claim within sixty days of receiving notice. The first of the two consolidated cases concerned fractional mineral interests severed in 1942 and 1944 from a 132-acre tract in Gibson County, Indiana. Eleven appellants claimed ownership of those interests, and a twelfth appellant held oil and gas leases executed by the others in 1976 and 1977. The appellee owned the surface of the tract. The parties stipulated that the mineral interests had not been used for twenty years and no statement of claim had been filed within the grace period, so the interests lapsed on September 2, 1973. On April 28, 1977, the surface owner published and mailed notice of the lapse. The mineral owners then filed statements of claim, and the surface owner commenced an action seeking a declaratory judgment that the interests had been extinguished. In the second case the severed mineral estate was created on March 1, 1954, when appellants Pond and Bobe conveyed land to the appellees by warranty deed that reserved the minerals. On June 17, 1976, Pond and Bobe executed a coal mining lease with appellant Consolidated Coal Co. The parties stipulated that the interest had not been used and no statement of claim had been filed during the twenty years following its creation, resulting in lapse on March 1, 1974. Notice of the lapse was given by letter and by publication in the Princeton Daily Clarion on March 4, 1977. The parties jointly filed suit on January 12, 1978, to resolve their conflicting claims to the mineral rights. In both cases the agreed statements of facts recorded that the mineral owners had neither used their interests nor filed claims within the statutory periods, and the surface owners had given notice after the periods had expired. The statements did not indicate whether any appellant had known of the Act or its possible effect before receiving notice. The state trial court held the statute unconstitutional. The Indiana Supreme Court reversed. The United States Supreme Court noted probable jurisdiction and consolidated the appeals.
View caseGerald Gibson was named a beneficiary under a will probated in Ohio. The governing instrument imposed a filing deadline for claims against the estate. Gerald submitted his claim after the stated deadline but within an additional statutory grace period. The court accepted the late filing and allowed the claim to proceed on the merits.
David Shapira, M. D., died April 13, 1973, a resident of this county. This is an action for a declaratory judgment and the construction of the will of David Shapira, M. D. By agreement of the parties, the case has been submitted upon the pleadings and the exhibit. The portions of the will in controversy provide that the residue goes to the testator's three beloved children, Buth Shapira Aharoni, Daniel Jacob Shapira, and Mark Benjamin Simon Shapira in equal shares with qualifications. The will states that Daniel Jacob Shapira should receive his share of the bequest only if he is married at the time of the testator's death to a Jewish girl whose both parents were Jewish. In the event that at the time of the testator's death he is not married to a Jewish girl whose both parents were Jewish, then his share should be kept by the executor for a period of not longer than seven years. If Daniel Jacob gets married within the seven year period to a Jewish girl whose both parents were Jewish, the executor is instructed to turn over his share to him. In the event that Daniel Jacob is unmarried within the seven years after the testator's death to a Jewish girl whose both parents were Jewish, or if he is married to a non Jewish girl, then his share should go to the State of Israel, absolutely. The provision for the testator's other son Mark is conditioned substantially similarly. Daniel Jacob Shapira, the plaintiff, is twenty-one years of age, unmarried and a student at Youngstown State University. The plaintiff alleges that the condition upon his inheritance is unconstitutional, contrary to public policy and unenforceable because of its unreasonableness, and that he should be given his bequest free of the restriction.
Gwen Gallagher inherited an undivided interest in allotted Indian land. A federal statute required heirs to file claims within a set period or lose the interest. Gwen filed her claim after the initial deadline but before the statutory grace period closed. Her filing preserved the interest against automatic escheat to the tribe.
In the late 19th century, Congress enacted a series of land acts that divided communal Indian reservations into individual allotments for Indians and unallotted lands for non-Indian settlement. The Act of March 2, 1889, allotted 320 acres to each male Sioux head of household and 160 acres to most other individuals on the Great Reservation of the Sioux Nation, with the allotted lands held in trust by the United States. Ownership of these allotted lands fragmented over successive generations into numerous undivided interests, with some parcels having hundreds of owners. Because the land was held in trust and often could not be alienated or partitioned, the fractionation problem grew over time. This created administrative difficulties and economic waste. A 1928 report and comprehensive 1960 House and Senate studies indicated that one-half of approximately 12 million acres of allotted trust lands were held in fractionated ownership. In 1983, Congress enacted the Indian Land Consolidation Act. Section 207 provided that no undivided fractional interest in any tract of trust or restricted land within a tribe's reservation shall descend by intestacy or devise but shall escheat to the tribe if such interest represents 2 per centum or less of the total acreage in such tract and has earned to its owner less than $100 in the preceding year before it is due to escheat. The provision was signed into law on January 12, 1983, and became effective immediately, with no compensation provided to owners of escheated interests. Four enrolled members of the Oglala Sioux Tribe died in 1983 while owning fractional interests subject to the escheat provision. Chester Irving died on March 18, Mary Poor Bear-Little Hoop Cross died on March 23, Charles Leroy Pumpkin Seed died on April 2, and Edgar Pumpkin Seed died on June 23. Collectively the four decedents owned 41 such interests whose values included approximately $100 for the two interests lost by the Irving estate, approximately $2,700 for the 26 interests in the Cross estate, and approximately $1,816 for the 13 interests in the Pumpkin Seed estates. The three appellees are enrolled members of the Oglala Sioux Tribe who are or represent heirs or devisees of the decedents. Mary Irving is the daughter of Chester Irving, Eileen Bissonette is the guardian for the five minor children of Mary Poor Bear-Little Hoop Cross, and Patrick Pumpkin Seed is the son of Charles Leroy Pumpkin Seed and nephew of Edgar Pumpkin Seed. But for the escheat provision the fractional interests would have passed to the appellees or those they represent. Appellees filed suit in the United States District Court for the District of South Dakota claiming that the escheat provision resulted in a taking of property without just compensation in violation of the Fifth Amendment. The District Court granted summary judgment for the Government. The Court of Appeals for the Eighth Circuit reversed. The Supreme Court granted certiorari.
3 common questions
A grace period extends the time to cure only when the mortgage or applicable statute expressly provides one. Cure within the period prevents acceleration and foreclosure. Failure to cure allows the lender to declare the full balance due.
Supporting sources
Yes. In contexts such as mineral lapse statutes or adverse possession disability provisions, failure to act within the grace period extinguishes the interest or bars the claim with no further opportunity to cure.
Supporting sources
Mailing alone may satisfy delivery if the notice is clear and the parties' agreement or statute so provides. Actual receipt is sometimes required before the period begins to run, especially when the notice is inconspicuous or the borrower denies awareness.
Supporting sources
…the interest out of which it was carved." The statute, which became effective on September 2, 1971, contained a 2-year grace period in which owners of mineral interests that were then unused and subject to lapse could preserve those interests by filing a claim in the recorder's office. The "use" of a mineral…