ARTICLE: THE ECONOMIC LOSS DOCTRINE: SAVING CONTRACT WARRANTY LAW FROM DROWNING IN A SEA OF TORTS Skip over navigation
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Copyright (c) 1995 The University of Toledo
Toledo Law Review

ARTICLE: THE ECONOMIC LOSS DOCTRINE: SAVING CONTRACT WARRANTY LAW FROM DROWNING IN A SEA OF TORTS

SPRING, 1995

26 U. Tol. L. Rev. 591

Author

Christopher Scott D'Angelo *

Excerpt

UNDER the economic loss doctrine, 1 there is no tort liability -- whether under strict liability, negligence or negligent misrepresentation theories -- when a product defect causes only economic losses and neither personal injury to the plaintiff nor damage to the plaintiff's other property. 2 This article discusses the economic loss doctrine and supports the doctrine's inclusion in the proposed Restatement of the Law of Torts: Products Liability. 3

Economic loss that cannot be recovered in tort has been "defined as the diminution in the value of the product because it is inferior in quality and does not work for the general purposes for which it was manufactured and sold." 4 Economic loss also includes "damages for inadequate value, costs of repair and replacement of the defective product, or consequent loss of profits -- without any claim of personal injury or damage to other property." 5 More specifically, "direct economic loss may be 'out of pocket' -- the difference in value between what is given and received -- or 'loss of bargain' -- the difference between the value of what is received and its value as represented. Direct economic loss may also be measured by costs of replacement and repair." 6 Consequential economic loss includes, for example, loss of profits. 7

As the Florida Supreme Court recently noted in Casa Clara Condominium Ass'n v. Charley Toppino & Sons, Inc., 8 "the economic loss rule has been adopted in a majority of jurisdictions." 9

I. A ...
 
 
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