Also known as: economic-loss rule · economic loss doctrine · ELR
Written by attorneys · grounded in primary & secondary sources — see below
A tort doctrine that bars recovery in negligence or strict liability for purely economic losses unaccompanied by personal injury or damage to property other than the defective product itself. The rule preserves the boundary between contract and tort by channeling disappointed commercial expectations into warranty or contract claims. In some jurisdictions the doctrine is confined to products liability actions and does not block independent tort claims arising from contractual relationships outside that setting.
River Therapeutics hired Ridge Bio under a services contract to manage clinical trial data. Ridge Bio negligently mis-recorded patient responses, delaying FDA approval and causing River Therapeutics to miss a marketing window and suffer lost sales and a valuation drop. Because the claim arose from a contractual relationship outside products liability, the economic loss rule did not bar the negligence action for the resulting financial harm.
Saratoga Fishing purchased a fishing vessel from Martinac and later added nets and a skiff to the boat. When a defect in the vessel caused it to sink, the added equipment was lost along with the vessel itself. The economic loss rule prevented tort recovery for damage to the vessel but allowed recovery for the separately added equipment treated as other property.
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In Florida the rule is limited to products liability actions and does not bar tort claims arising from contractual relationships in other contexts. Parties remain subject to contract principles and independent tort doctrines, but the economic loss rule itself no longer prevents recovery of pure economic loss in those settings.
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Property added to a defective product by a prior owner in the chain of title can qualify as other property, allowing tort recovery for its loss even when the product itself is damaged only economically.
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The rule bars tort recovery when the claimed loss is purely economic and stems from the failure of a product or service to meet contractual expectations without accompanying physical injury or damage to separate property.
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…by the plaintiff, not the product sold by the defendant”); see also Fox & Loftus, Riding the Choppy Waters of East River: Economic Loss Doctrine Ten Years Later, 64 Def. Couns. J. 260, 264, n. 29 (1997) (citing numerous other cases and observing that “[t]he trend in defining ‘economic loss’ is to focus on what the plaintiff…