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LSDefine
Simple English definitions for legal terms
Substantial Impairment
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A quick definition of Substantial Impairment:
Substantial Impairment: When you buy something in parts and the seller gives you a part that is not perfect, you have the right to say no and ask for a better one. This is called rejecting the tender. But, if the problem is not too big and can be fixed, you cannot reject it. If the problem is really big and makes the whole thing you bought not worth it, you can say no to the whole thing.
A more thorough explanation:
Substantial impairment is a term used in Article 2 of the Uniform Commercial Code. It applies to installment contracts for the sale of goods. When a buyer receives goods that are not perfect, they have the right to reject them if the defect substantially impairs the installment and cannot be fixed. If the defect is so severe that it substantially impairs the value of the entire contract, the buyer can reject the entire contract.
Let's say a buyer purchases a new car and discovers that the brakes don't work properly. If the defect is severe enough that it substantially impairs the car's value, the buyer can reject the entire contract and return the car for a refund.
Another example could be a buyer purchasing a new refrigerator that doesn't keep food cold. If the defect substantially impairs the refrigerator's ability to function as intended, the buyer can reject the installment and request a replacement or refund.
These examples illustrate how substantial impairment applies to installment contracts for the sale of goods. If the defect is severe enough that it substantially impairs the value or function of the product, the buyer has the right to reject it and seek a remedy.