The economic-harm rule, also referred to as the economic-loss rule, is a principle in tort law that stipulates a plaintiff cannot file a lawsuit for solely monetary loss resulting from the defendant’s actions, unless there is fraud or negligent misrepresentation, or a special relationship exists between the parties. Consequently, individuals who experience financial loss without physical injury or property damage are unable to seek compensation through legal means. Nevertheless, there are specific circumstances where exceptions to this rule apply.
The economic-harm rule, also referred to as the economic-loss rule or economic-loss doctrine, is a principle in tort law that prohibits a plaintiff from suing for purely monetary loss caused by the defendant, unless there is physical injury or property damage involved. For instance, if a company buys a defective product that results in financial loss, they cannot file a lawsuit against the manufacturer for economic loss under the economic-harm rule. However, there are exceptions to this rule, such as when the defendant engages in fraud or negligent misrepresentation, or when there is a special relationship between the parties. The courts have used the economic-harm rule as a means to differentiate between tort and warranty. In some states, this common law doctrine has been elevated to the status of the economic-loss doctrine, which means that once loss is classified as economic, it cannot be recovered through negligence or strict tort, and possibly not even through fraud or misrepresentation. For example, if a contractor constructs a house with a faulty foundation, and the homeowner suffers financial loss due to repair costs, they cannot sue the contractor under the economic-harm rule. However, if the contractor intentionally conceals the defects in the foundation, the homeowner may have grounds to sue for fraud or negligent misrepresentation. In summary, the economic-harm rule restricts a plaintiff’s ability to recover purely monetary loss in tort law, but there are exceptions to this rule in specific circumstances.
The Economic-Harm Rule is a legal principle that states a person cannot sue for damages solely based on economic loss or financial harm without any accompanying physical injury or property damage.
No, the Economic-Harm Rule primarily applies to tort cases, where a person seeks compensation for harm caused by another party’s negligence or intentional actions.
In general, you cannot sue someone solely for economic losses unless there is a recognized exception to the Economic-Harm Rule, such as a contractual relationship or a specific statutory provision that allows for such claims.
Exceptions to the Economic-Harm Rule may include cases involving breach of contract, fraud, misrepresentation, or certain statutory violations that specifically allow for recovery of economic damages.
Yes, you may be able to sue a company for economic losses caused by a defective product under product liability laws, which often provide exceptions to the Economic-Harm Rule.
Yes, professionals such as doctors, lawyers, or accountants can be held liable for economic losses resulting from their negligence or professional malpractice, even without physical injury or property damage.
Suing a government entity for economic losses can be challenging due to various legal immunities and limitations. However, exceptions may exist if the government’s actions violated constitutional rights or specific statutory provisions.
Yes, in a personal injury lawsuit, you can typically seek compensation for both economic and non-economic damages, including medical expenses, lost wages, and other financial losses resulting from the injury.
Yes, if a business engages in unfair trade practices, such as false advertising or deceptive practices, you may be able to sue for economic losses under consumer protection laws.
Yes, in a wrongful death lawsuit, you can seek compensation for economic losses suffered by the deceased person’s dependents, including loss of financial support, inheritance, and other related economic damages.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 17th April 2024.
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