Substantial Impairment

Under Article 2 of the Uniform Commercial Code, when dealing with installment contracts for the sale of goods, substantial impairment is the standard used to determine if a buyer has the right to reject tender by the seller, where tender is not perfect. A buyer has the right to reject an installment if the defect in the installment substantially impairs the installment and cannot be cured. Furthermore, if a defect in the installment substantially impairs the value of the entire contract, then the buyer has the right to reject the entire contract.

 

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