economic loss, remedies, contracts, tort law, Tiara Condiminium, products liability
Most litigants, if given the chance, prefer to assert tort theories to recover their economic losses, rather than rely on the remedies provided under contract law. This is primarily because plaintiffs have the potential to recover more damages under tort law than contract law. However, most courts have adopted a doctrine known as the economic loss rule to bar plaintiffs from asserting certain tort theories to recover for their economic loss. Although the economic loss rule may seem like an easy way to maintain the boundary between tort law and contract law, confusion abounds when courts attempt to determine the proper contexts in which to apply the doctrine.
In 2013, the Florida Supreme Court resurrected issues of the doctrine’s proper scope when it rendered Tiara Condominium Ass’n v. Marsh & McLennan Cos., which restricted application of the doctrine to products liability cases. Although the Florida Supreme Court has held that the economic loss rule applies only when a defective product causes pecuniary loss to the plaintiff, other jurisdictions adhere to a broader application of the doctrine. In these jurisdictions, the doctrine serves a fundamental purpose to protect the boundary line between tort law and contract law by preventing parties who are in contractual privity from circumventing the bargain that they made in their contract. This Note argues that the economic loss rule is not just for products liability, but should be applied to serve such a fundamental purpose, specifically where sophisticated parties engage in arms-length transactions, bargaining for the allocation of risk and economic loss in their contract.
Not Just for Products Liability: Applying the Economic Loss Rule Beyond Its Origins,
83 Fordham L. Rev. 1073
Available at: https://ir.lawnet.fordham.edu/flr/vol83/iss2/22