The rule confines parties to contract remedies where the loss is to the project itself rather than to persons or other property. Application to construction varies, with exceptions for personal injury, damage to other property, and independent duties.
The other property exception is heavily litigated.
Alternative Names:
Economic Loss Doctrine (Construction), Construction Economic Loss Rule
Why it Matters?
The other property analysis determines whether damage to one building component caused by another is recoverable in tort, and jurisdictions divide on whether an integrated structure is a single product. Where it is, damage confined to the building is economic loss channeled to contract. That characterization decides whether a party without contractual privity has any claim at all against a remote contractor or supplier.
Frequently Confused with
Related terms
Frequently asked questions
What is the other property exception?
Why does the characterization matter?
