Defenses and Affirmative Defenses
Product and Tort Defenses
The economic loss doctrine confines parties to contract remedies where the only loss is economic, such as the cost of repairing or replacing a defective product or lost profits from its failure.
The doctrine typically does not apply where the defect caused personal injury or damaged property other than the product itself.
Alternative Names:
Economic Loss Rule, Economic Loss Bar
Why it Matters?
This doctrine is the primary defense against tort claims dressed up to escape contractual limitations, and it is especially valuable in product and construction litigation where plaintiffs plead negligence to avoid warranty disclaimers and damage caps. The recurring fight is the other property question: whether a component that damaged the larger assembly caused damage to other property or merely to the integrated product.
Frequently Confused with
Frequently asked questions
When does the economic loss doctrine not apply?
Does the doctrine bar fraud claims?
