Copyright (c) 1994 University of South Carolina
South Carolina Law Review
ARTICLE: CONTRACT LAW
46 S.C. L. Rev. 31
RACHEL SCOTT DECKER
I. COURT LIMITS TORT REMEDIES IN CONTRACT
In Myrtle Beach Pipeline Corp. v. Emerson Electric Co. 1 the federal district court limited further the availability of tort remedies in breach of contract cases. The court barred a negligence claim arising from a component part's failure that resulted in substantial damage to property not owned by the plaintiff. Relying on the economic loss rule, 2 the court held that where "sophisticated parties to a commercial transaction have negotiated a contract, . . . and the product injures only itself . . ., contract law, specifically the Uniform Commercial Code, and not tort law, provides the exclusive rights and remedies of the parties." 3 The court expanded the economic loss rule's effect by defining restrictively the "other property" limit to the rule. The court held that any property not owned by the plaintiff did not constitute other property. 4 In dicta, the court provided an even more limiting definition of other property, theoretically consistent with the rationale supporting the economic loss doctrine: "[T]he 'other property' exception is not met if: . . . injury to this 'other property,' even if owned by a plaintiff, were, or should have been, contemplated by the contract." 5 Myrtle Beach Pipeline expands the application of the economic loss rule and limits the encroachment of tort remedies onto contract law. South Carolina courts have not addressed the economic loss rule's application in the commercial context. 6 This article will focus on the ...
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