Also known as: economically wasteful · avoidance of economic waste
Written by attorneys · grounded in primary & secondary sources — see below
2 senses
A condition arising when income from property fails to cover the expenses a life tenant must pay for maintenance, taxes, mortgage interest, and insurance.
A condition arising when remedying a contractual breach would require destruction of substantially completed work at a cost disproportionate to the benefit obtained.
A condition arising when income from property fails to cover the expenses a life tenant must pay for maintenance, taxes, mortgage interest, and insurance.
Edward Everett sold his promissory note secured by a mortgage on commercial property to Elemental Pharmaceuticals. The sale documents transferred only the note and omitted any assignment of the mortgage. The separation left the note unsecured in practice, producing economic waste by stripping enforcement efficacy from the security interest.
Esther Eisenberg held a life estate in farmland that had become unproductive under modern conditions. She petitioned the court to order a sale so that the proceeds could be invested to generate income covering taxes and maintenance. The court granted relief on the ground that continued unproductive use would constitute economic waste.
A condition arising when remedying a contractual breach would require destruction of substantially completed work at a cost disproportionate to the benefit obtained.
Elite Dynamics contracted to buy custom marine equipment from Eastern Electric but repudiated before delivery. Eastern Electric sought lost profits plus incidental costs rather than attempting to resell the specialized goods at a loss. The court awarded the seller's lost profit measure because forcing resale would have produced economic waste.
Each sense below has its own examples, sources, and questions.
Emanuel Escobar, a state education official, proposed adding a second public military-style college despite an existing private institution offering the same program. The plan would duplicate facilities already available. The proposal was rejected because the duplication would produce economic waste without advancing legitimate educational diversity.
Emma Erickson, a dairy farmer, challenged a state order fixing minimum milk prices. The order was defended as necessary to prevent destructive price competition that would drive producers out of business and create shortages. The court upheld the regulation because it directly addressed economic waste in the milk industry.
Edith Eberhardt inherited a small fractional interest in allotted Indian land that had become highly fractionated through successive generations. She challenged a federal statute authorizing the taking of such interests without compensation. The Court held that the statute effected a taking because continued fractionation produced economic waste by rendering the land unusable.
Economic waste exists when the property generates insufficient income to pay the life tenant's obligations for maintenance, taxes, mortgage interest, and insurance. The life tenant or remainderman may then seek a judicial sale to prevent the ongoing loss.
Separation renders the note unsecured as a practical matter because the mortgage holder lacks the right to enforce the obligation. The rule therefore presumes that a transfer of the note carries the mortgage with it unless the parties clearly agree otherwise.
No. Economic waste occurs only when income fails to cover the life tenant's required expenses. It does not turn on whether the property could generate more revenue under a different use.
When the cost to remedy a defect would require tearing down substantially completed work at a cost far exceeding the resulting increase in value, courts measure damages by the diminution in value instead of the cost of performance.
…should be viewed as a whole—public and private' "—because such an approach enhances diversity and because " it is academic and economic waste to permit unwarranted duplication.' " Id. , at 1420-1421 (quoting 1974 Report of the General Assembly Commission on Higher Education to the General Assembly of Virginia). It is thus…