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The Economic Loss Rule


The Economic Loss Rule is a doctrine that prohibits recovery for an economic loss resulting from a wrongful act or an infringement of a right, when unaccompanied by physical property damage or personal injury. Instead, only parties to the contract or contractual beneficiaries may recover economic losses. An economic loss is a financial loss.

The Economic Loss Rule

The Economic Loss Rule has three (3) variations:

  1. Variation one prohibits recovery for an economic loss in tort (a wrongful act or an infringement of a right) where there is no personal injury or property damage, without regard to contract;
  2. Variation two prohibits recovery for an economic loss in tort where the loss is also compensable by a breach of contract claim; and
  3. Variation three prohibits recovery for an economic loss on both contract and tort theories unless the tort is separate and independent from the claimed contract breach.

The Economic Loss Rule is a doctrine that prohibits recovery for an economic loss resulting from a wrongful act or an infringement of a right, when unaccompanied by physical property damage or personal injury.

To learn more about the economic loss rule, as it applies to a file you’re currently working, contact an attorney with our subrogation practice.