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Nanomagnetic logic circuits have recently gained interest as a possible post CMOS ultralow-power computing platform. In these circuits, single-domain nanomagnets communicate and perform logical computations through nearest neighbor dipole interactions. The state variable is magnetization direction and computations can take place without passing an electric current. Both experiment and theory have shown, however, that errors in circuit operation can sometimes occur. In this paper, we investigate the reasons for this, develop a simple model to explain imperfections in 1-D chains of nanomagnets, and show that it agrees with experiment. Finally, we discuss possible improvements in nanomagnet design suggested by the model to improve error rates.