Also known as: deficiencies · tax deficiency · deficiency judgment
Written by attorneys · grounded in primary & secondary sources — see below
4 senses
The amount by which a foreclosure sale price falls short of the outstanding mortgage debt plus costs. This shortfall permits the mortgagee to pursue a personal judgment against the mortgagor for the unpaid balance unless state law prohibits or caps such recovery.
The amount by which a foreclosure sale price falls short of the outstanding mortgage debt plus costs. This shortfall permits the mortgagee to pursue a personal judgment against the mortgagor for the unpaid balance unless state law prohibits or caps such recovery.
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The reduction in the value of performance received because the other party failed to deliver what was promised. This measure forms part of expectation damages and is added to any incidental or consequential losses.
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A mental condition such as insanity that does not excuse an actor from liability for conduct falling below the reasonable-person standard. The actor remains responsible for resulting harm.
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A shortfall in the quantity or quality of goods that prevents full conformity with the contract. The buyer may accept the goods with a price adjustment or avoid the contract entirely.
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The reduction in the value of performance received because the other party failed to deliver what was promised. This measure forms part of expectation damages and is added to any incidental or consequential losses.
A mental condition such as insanity that does not excuse an actor from liability for conduct falling below the reasonable-person standard. The actor remains responsible for resulting harm.
A shortfall in the quantity or quality of goods that prevents full conformity with the contract. The buyer may accept the goods with a price adjustment or avoid the contract entirely.
Each sense below has its own examples, sources, and questions.
Damian Decker borrowed $400,000 secured by his home. After default the property sold at foreclosure for $310,000. The mortgagee obtained a deficiency judgment for the remaining balance plus costs because state law permitted recovery of the shortfall.
Dominic Drake's estate contained household goods valued at $9,000 after secured claims. His surviving spouse received the $15,000 exempt-property allowance by claiming additional estate assets to cover the deficiency.
A mortgagee may obtain a deficiency judgment when the foreclosure sale price is less than the debt plus costs. State law governs whether the judgment is available and may limit or abolish it entirely.
Supporting sources
Diamond Manufacturing contracted to supply custom parts meeting exact tolerances. The delivered parts fell short of specifications, lowering the value of the finished product by $45,000. The buyer recovered that amount as the loss in value caused by the deficiency.
Diego Duarte signed a letter confirming an oral agreement but omitted the buyer's name. The name and address printed on the envelope supplied the deficiency, allowing the two documents to be read together as a sufficient memorandum.
The loss-in-value component equals the difference between the value of the performance promised and the value of the performance actually received. It is added to incidental or consequential losses and reduced by any costs avoided.
Supporting sources
Deanna Davenport, who suffered from a diagnosed mental impairment, drove through a red light and struck Dylan Duffy's vehicle. The court held that her mental deficiency did not relieve her of liability for failing to meet the reasonable-person standard.
A mental impairment does not relieve an adult defendant of negligence liability. The defendant must still conform to the standard of a reasonable person under like circumstances.
Supporting sources
Dixon Foods ordered 500 cases of produce. Only 420 cases arrived and the remainder had deteriorated. Dixon accepted the shipment but received a proportionate reduction in the contract price to reflect the deficiency in quantity and condition.
The buyer may inspect the goods and either avoid the contract or accept them with a price allowance reflecting the deficiency. No further claim against the seller is permitted once the allowance is taken.
Supporting sources
…bond. It does not require a showing of exigent circumstances. It does not provide for an immediate postattachment hearing. These deficiencies render the statute unconstitutional. The judgment of the Court of Appeals is affirmed. Concurring opinions Concurring in part — Justice Blackmun I join Parts I, II, and III of…