ASCE Member Insurance Blog

Jurisdictions Where the Economic Loss Doctrine Bars Extra-Contractual Claims Highlight the Importance of Well-Drafted Contracts

Posted on 6/15/2017 by ASCE Insurance in civil engineering civil engineer jurisdictions extra-contractual claims

By Sarah A. Johnson, Esq.

The economic loss doctrine is the legal principle that economic loss may not be recovered under a negligence or tort theory.1 “Economic loss” has been defined as damages for inadequate value, cost of repair and replacement of a defective product, or the consequent loss of profits, as well as the loss of value of the product due to its inferior quality.2 The theory behind this doctrine is that a purchaser’s wish to reap the benefits of his bargain is not an interest protected by tort law.3 Rather, the remedy for economic loss relating to the purchaser’s disappointed expectations properly lies in contract.4

read more..