Also known as: substantially impair · substantially impairs · substantially impaired · substantially impairing · material impairment
Written by attorneys · grounded in primary & secondary sources — see below
A material reduction in the value of contractual performance, goods, or property to the injured party. The reduction must be significant enough that it is just to treat the breach as total or to permit remedies such as revocation of acceptance or cancellation.
Steven Silva and other investors filed individual suits against a fund manager for mismanagement. A court considering class certification found that separate adjudications would substantially impair the ability of absent class members to protect their recovery rights because any judgment would practically determine the fund's liability for the entire group.
Simon Stern contracted with Sterling Dynamics for phased delivery of specialized sorting machines over eighteen months. When Sterling notified Simon that it would divert machines to another buyer and later abandoned the production line after a fire, the cumulative nonperformance substantially impaired the value of the entire phased contract to Simon at the time of breach.
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Sierra Santos leased commercial space from Stonehaven Properties under a lease requiring the landlord to provide on-site maintenance services. When Stonehaven attempted to assign its interest to a distant management company, the assignment would substantially impair Sierra's ability to obtain the personal services the lease contemplated.
Sarah Sullivan sued for conversion of a commercial vehicle. The converter offered prompt return of the vehicle after discovering a good-faith mistake. Because the vehicle's value to Sarah was not substantially impaired by the temporary deprivation, the court reduced the damages award.
During a severe economic emergency, State A enacted a temporary moratorium on mortgage foreclosures. The law substantially impaired existing mortgage contracts but was upheld under the Contract Clause because it served an important public purpose and was narrowly tailored to the emergency.
Seth Shapiro administered intoxicants to Simone Sanders without her knowledge to prevent resistance. Because the intoxicants substantially impaired Simone's power to appraise or control her conduct, Shapiro was guilty of rape under the statute.
The reduction in value must be material enough that it is just to allow recovery of damages based on all remaining rights to performance. Courts examine the facts and circumstances of each case, including the buyer's particular needs and whether the nonconformity prevents the goods from serving their intended purpose.
No. Total destruction is not necessary. A significant diminution that prevents the injured party from obtaining the expected benefit of the bargain satisfies the standard, even if some residual value remains.
Separate adjudications that would practically determine the rights of absent class members or impede their ability to protect their interests create the required risk. The impairment need not be certain. Practical effects on the interests of nonparties suffice.
…may remove the independent counsel only for good cause, physical disability, mental incapacity, or any other condition that substantially impairs the performance of his duties. The Act also provides that the independent counsel shall be subject to congressional oversight. Appellee Olson, the former Assistant Attorney General for the…