Purely Economic Loss in Conflict of Laws: The Case of Tortious Interference with Contract

Abstract

This paper focuses on the question of how a court should determine the applicable law in cases of tortious interference with contract on the basis of the Rome II Regulation. It argues that the damage arising out of contract-interference, which is generally purely economic in nature, should be considered ‘damage’ within the meaning of the lex loci damni rule of Article 4(1) Rome II. In order to determine the place where the damage occurred, the place of performance of the obligation interfered with can be an appropriate criterion. However, if the place of performance is difficult to establish, the court will have to determine the place of damage in another way. Even though usually not applicable in contract-interference cases, the market effects rule of Article 6(1) Rome II may provide guidance in specific cases. In addition, this paper proposes a rather flexible interpretation of the escape clause of Article 4(3) Rome II in favour of the manifestly more closely connected law, taking into account of all relevant factors. In keeping with the prevailing view in the United States, the court should also attach importance to the place of tortious conduct.

Keywords: Conflict of laws, Rome II Regulation, Brussels I Recast Regulation, torts, tortious interference with contract, inducement of a breach of contract, pure economic loss, locus damni, place of damage, Erfolgsort, Universal Music, Dolphin case, AMT Futures v. Marzillier, US conflicts law